Correlation Between Talanx AG and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Ebro Foods 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 Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Ebro Foods SA, you can compare the effects of market volatilities on Talanx AG and Ebro Foods 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 Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Ebro Foods.
Diversification Opportunities for Talanx AG and Ebro Foods
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Talanx and Ebro is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA 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 Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods SA has no effect on the direction of Talanx AG i.e., Talanx AG and Ebro Foods go up and down completely randomly.
Pair Corralation between Talanx AG and Ebro Foods
Assuming the 90 days horizon Talanx AG is expected to generate 1.38 times more return on investment than Ebro Foods. However, Talanx AG is 1.38 times more volatile than Ebro Foods SA. It trades about 0.23 of its potential returns per unit of risk. Ebro Foods SA is currently generating about -0.07 per unit of risk. If you would invest 7,225 in Talanx AG on August 24, 2024 and sell it today you would earn a total of 495.00 from holding Talanx AG or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. Ebro Foods SA
Performance |
| Timeline |
| Talanx AG |
| Ebro Foods SA |
Talanx AG and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Ebro Foods
The main advantage of trading using opposite Talanx AG and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| Talanx AG vs. PROSIEBENSAT1 MEDIADR4 | Talanx AG vs. PLAYSTUDIOS A DL 0001 | Talanx AG vs. SMA Solar Technology | Talanx AG vs. AECOM TECHNOLOGY |
| Ebro Foods vs. Origin Agritech | Ebro Foods vs. SIVERS SEMICONDUCTORS AB | Ebro Foods vs. Talanx AG | Ebro Foods vs. INTUITIVE SURGICAL |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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