Correlation Between Talanx AG and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Airbus SE 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 Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Airbus SE, you can compare the effects of market volatilities on Talanx AG and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Airbus SE.
Diversification Opportunities for Talanx AG and Airbus SE
Good diversification
The 3 months correlation between Talanx and Airbus is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Talanx AG i.e., Talanx AG and Airbus SE go up and down completely randomly.
Pair Corralation between Talanx AG and Airbus SE
Assuming the 90 days horizon Talanx AG is expected to generate 0.79 times more return on investment than Airbus SE. However, Talanx AG is 1.26 times less risky than Airbus SE. It trades about 0.36 of its potential returns per unit of risk. Airbus SE is currently generating about -0.01 per unit of risk. If you would invest 7,140 in Talanx AG on August 28, 2024 and sell it today you would earn a total of 730.00 from holding Talanx AG or generate 10.22% 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. Airbus SE
Performance |
| Timeline |
| Talanx AG |
| Airbus SE |
Talanx AG and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Airbus SE
The main advantage of trading using opposite Talanx AG and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| Talanx AG vs. NIPPON STEEL SPADR | Talanx AG vs. Insteel Industries | Talanx AG vs. Zijin Mining Group | Talanx AG vs. COSMOSTEEL HLDGS |
| Airbus SE vs. SEKISUI CHEMICAL | Airbus SE vs. COLUMBIA SPORTSWEAR | Airbus SE vs. PLAYSTUDIOS A DL 0001 | Airbus SE vs. Sinopec Shanghai Petrochemical |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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