Correlation Between Talanx AG and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Macquarie Group 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 Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Macquarie Group Limited, you can compare the effects of market volatilities on Talanx AG and Macquarie Group 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 Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Macquarie Group.
Diversification Opportunities for Talanx AG and Macquarie Group
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Talanx and Macquarie is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Macquarie Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group 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 Macquarie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Talanx AG i.e., Talanx AG and Macquarie Group go up and down completely randomly.
Pair Corralation between Talanx AG and Macquarie Group
Assuming the 90 days horizon Talanx AG is expected to generate 0.86 times more return on investment than Macquarie Group. However, Talanx AG is 1.17 times less risky than Macquarie Group. It trades about 0.31 of its potential returns per unit of risk. Macquarie Group Limited is currently generating about 0.01 per unit of risk. If you would invest 7,210 in Talanx AG on August 25, 2024 and sell it today you would earn a total of 675.00 from holding Talanx AG or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. Macquarie Group Limited
Performance |
| Timeline |
| Talanx AG |
| Macquarie Group |
Talanx AG and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Macquarie Group
The main advantage of trading using opposite Talanx AG and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Macquarie Group 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 Macquarie Group will offset losses from the drop in Macquarie Group's long position.| Talanx AG vs. KIMBALL ELECTRONICS | Talanx AG vs. AVITA Medical | Talanx AG vs. Avanos Medical | Talanx AG vs. LG Electronics |
| Macquarie Group vs. Gruppo Mutuionline SpA | Macquarie Group vs. The Hanover Insurance | Macquarie Group vs. Insurance Australia Group | Macquarie Group vs. MUTUIONLINE |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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