Correlation Between Talanx AG and BHP Group
Can any of the company-specific risk be diversified away by investing in both Talanx AG and BHP Group 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 BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and BHP Group Limited, you can compare the effects of market volatilities on Talanx AG and BHP Group 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 BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and BHP Group.
Diversification Opportunities for Talanx AG and BHP Group
Excellent diversification
The 3 months correlation between Talanx and BHP is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited 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 BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Talanx AG i.e., Talanx AG and BHP Group go up and down completely randomly.
Pair Corralation between Talanx AG and BHP Group
Assuming the 90 days horizon Talanx AG is expected to generate 0.9 times more return on investment than BHP Group. However, Talanx AG is 1.12 times less risky than BHP Group. It trades about 0.33 of its potential returns per unit of risk. BHP Group Limited is currently generating about -0.14 per unit of risk. If you would invest 7,140 in Talanx AG on August 29, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. BHP Group Limited
Performance |
| Timeline |
| Talanx AG |
| BHP Group Limited |
Talanx AG and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and BHP Group
The main advantage of trading using opposite Talanx AG and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, BHP Group 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 BHP Group will offset losses from the drop in BHP Group's 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 |
| BHP Group vs. Superior Plus Corp | BHP Group vs. NMI Holdings | BHP Group vs. Origin Agritech | BHP Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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