Correlation Between Talanx AG and DEXUS
Can any of the company-specific risk be diversified away by investing in both Talanx AG and DEXUS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Talanx AG and DEXUS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and DEXUS, you can compare the effects of market volatilities on Talanx AG and DEXUS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Talanx AG with a short position of DEXUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and DEXUS.
Diversification Opportunities for Talanx AG and DEXUS
Significant diversification
The 3 months correlation between Talanx and DEXUS is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and DEXUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEXUS and Talanx AG is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Talanx AG are associated (or correlated) with DEXUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEXUS has no effect on the direction of Talanx AG i.e., Talanx AG and DEXUS go up and down completely randomly.
Pair Corralation between Talanx AG and DEXUS
Assuming the 90 days horizon Talanx AG is expected to generate 2.1 times less return on investment than DEXUS. But when comparing it to its historical volatility, Talanx AG is 1.22 times less risky than DEXUS. It trades about 0.04 of its potential returns per unit of risk. DEXUS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 384.00 in DEXUS on September 1, 2024 and sell it today you would earn a total of 61.00 from holding DEXUS or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Talanx AG vs. DEXUS
Performance |
| Timeline |
| Talanx AG |
| DEXUS |
Talanx AG and DEXUS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and DEXUS
The main advantage of trading using opposite Talanx AG and DEXUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, DEXUS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DEXUS will offset losses from the drop in DEXUS's long position.| Talanx AG vs. Retail Estates NV | Talanx AG vs. COMMERCIAL VEHICLE | Talanx AG vs. Geely Automobile Holdings | Talanx AG vs. Commercial Vehicle Group |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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