Correlation Between Talanx AG and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Gaztransport Technigaz 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 Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Talanx AG and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Gaztransport Technigaz.
Diversification Opportunities for Talanx AG and Gaztransport Technigaz
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Talanx and Gaztransport is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Talanx AG i.e., Talanx AG and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Talanx AG and Gaztransport Technigaz
Assuming the 90 days horizon Talanx AG is expected to generate 6.68 times less return on investment than Gaztransport Technigaz. But when comparing it to its historical volatility, Talanx AG is 1.56 times less risky than Gaztransport Technigaz. It trades about 0.08 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 12,780 in Gaztransport Technigaz SA on October 24, 2024 and sell it today you would earn a total of 1,640 from holding Gaztransport Technigaz SA or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Talanx AG |
| Gaztransport Technigaz |
Talanx AG and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Gaztransport Technigaz
The main advantage of trading using opposite Talanx AG and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| Talanx AG vs. Fuji Media Holdings | Talanx AG vs. PARKEN Sport Entertainment | Talanx AG vs. CVS Health | Talanx AG vs. ATRESMEDIA |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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