Correlation Between Talanx AG and Applied Materials
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Applied Materials 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 Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Applied Materials, you can compare the effects of market volatilities on Talanx AG and Applied Materials 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 Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Applied Materials.
Diversification Opportunities for Talanx AG and Applied Materials
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Talanx and Applied is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials 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 Applied Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials has no effect on the direction of Talanx AG i.e., Talanx AG and Applied Materials go up and down completely randomly.
Pair Corralation between Talanx AG and Applied Materials
Assuming the 90 days horizon Talanx AG is expected to generate 0.47 times more return on investment than Applied Materials. However, Talanx AG is 2.12 times less risky than Applied Materials. It trades about 0.33 of its potential returns per unit of risk. Applied Materials is currently generating about -0.02 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. Applied Materials
Performance |
| Timeline |
| Talanx AG |
| Applied Materials |
Talanx AG and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Applied Materials
The main advantage of trading using opposite Talanx AG and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Applied Materials 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 Applied Materials will offset losses from the drop in Applied Materials' long position.| Talanx AG vs. EAST SIDE GAMES | Talanx AG vs. Hochschild Mining plc | Talanx AG vs. National Beverage Corp | Talanx AG vs. The Boston Beer |
| Applied Materials vs. Superior Plus Corp | Applied Materials vs. NMI Holdings | Applied Materials vs. Origin Agritech | Applied Materials 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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