Correlation Between Talanx AG and Xinyi Solar
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Xinyi Solar 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 Xinyi Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Xinyi Solar Holdings, you can compare the effects of market volatilities on Talanx AG and Xinyi Solar 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 Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Xinyi Solar.
Diversification Opportunities for Talanx AG and Xinyi Solar
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Talanx and Xinyi is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Xinyi Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Solar Holdings 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 Xinyi Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Solar Holdings has no effect on the direction of Talanx AG i.e., Talanx AG and Xinyi Solar go up and down completely randomly.
Pair Corralation between Talanx AG and Xinyi Solar
Assuming the 90 days horizon Talanx AG is expected to generate 12.33 times less return on investment than Xinyi Solar. But when comparing it to its historical volatility, Talanx AG is 4.8 times less risky than Xinyi Solar. It trades about 0.03 of its potential returns per unit of risk. Xinyi Solar Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Xinyi Solar Holdings on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Xinyi Solar Holdings or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. Xinyi Solar Holdings
Performance |
| Timeline |
| Talanx AG |
| Xinyi Solar Holdings |
Talanx AG and Xinyi Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Xinyi Solar
The main advantage of trading using opposite Talanx AG and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Xinyi Solar 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 Xinyi Solar will offset losses from the drop in Xinyi Solar's long position.| Talanx AG vs. GameStop Corp | Talanx AG vs. Spirent Communications plc | Talanx AG vs. International Game Technology | Talanx AG vs. PENN NATL GAMING |
| Xinyi Solar vs. Superior Plus Corp | Xinyi Solar vs. NMI Holdings | Xinyi Solar vs. Origin Agritech | Xinyi Solar vs. SIVERS SEMICONDUCTORS AB |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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