Correlation Between Talanx AG and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Berkshire Hathaway 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 Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Berkshire Hathaway, you can compare the effects of market volatilities on Talanx AG and Berkshire Hathaway 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 Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Berkshire Hathaway.
Diversification Opportunities for Talanx AG and Berkshire Hathaway
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Talanx and Berkshire is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway 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 Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of Talanx AG i.e., Talanx AG and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Talanx AG and Berkshire Hathaway
Assuming the 90 days horizon Talanx AG is expected to generate 0.7 times more return on investment than Berkshire Hathaway. However, Talanx AG is 1.44 times less risky than Berkshire Hathaway. It trades about 0.3 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.1 per unit of risk. If you would invest 7,210 in Talanx AG on August 25, 2024 and sell it today you would earn a total of 675.00 from holding Talanx AG or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. Berkshire Hathaway
Performance |
| Timeline |
| Talanx AG |
| Berkshire Hathaway |
Talanx AG and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Berkshire Hathaway
The main advantage of trading using opposite Talanx AG and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.| Talanx AG vs. KIMBALL ELECTRONICS | Talanx AG vs. AVITA Medical | Talanx AG vs. Avanos Medical | Talanx AG vs. LG Electronics |
| Berkshire Hathaway vs. Zurich Insurance Group | Berkshire Hathaway vs. Superior Plus Corp | Berkshire Hathaway vs. NMI Holdings | Berkshire Hathaway vs. Origin Agritech |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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