Correlation Between Talanx AG and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Aluminumof China 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 Aluminumof China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Aluminum of, you can compare the effects of market volatilities on Talanx AG and Aluminumof China 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 Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Aluminumof China.
Diversification Opportunities for Talanx AG and Aluminumof China
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Talanx and Aluminumof is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China 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 Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of Talanx AG i.e., Talanx AG and Aluminumof China go up and down completely randomly.
Pair Corralation between Talanx AG and Aluminumof China
Assuming the 90 days horizon Talanx AG is expected to generate 0.31 times more return on investment than Aluminumof China. However, Talanx AG is 3.25 times less risky than Aluminumof China. It trades about 0.46 of its potential returns per unit of risk. Aluminum of is currently generating about 0.12 per unit of risk. If you would invest 7,050 in Talanx AG on September 4, 2024 and sell it today you would earn a total of 915.00 from holding Talanx AG or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Talanx AG vs. Aluminum of
Performance |
| Timeline |
| Talanx AG |
| Aluminumof China |
Talanx AG and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Aluminumof China
The main advantage of trading using opposite Talanx AG and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Aluminumof China 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| Talanx AG vs. BJs Wholesale Club | Talanx AG vs. American Eagle Outfitters | Talanx AG vs. AEON STORES | Talanx AG vs. URBAN OUTFITTERS |
| Aluminumof China vs. FIREWEED METALS P | Aluminumof China vs. Lion One Metals | Aluminumof China vs. Kaiser Aluminum | Aluminumof China vs. Ultra Clean Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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