Correlation Between Talanx AG and CAIRN HOMES
Can any of the company-specific risk be diversified away by investing in both Talanx AG and CAIRN HOMES 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 CAIRN HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and CAIRN HOMES EO, you can compare the effects of market volatilities on Talanx AG and CAIRN HOMES 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 CAIRN HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and CAIRN HOMES.
Diversification Opportunities for Talanx AG and CAIRN HOMES
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Talanx and CAIRN is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and CAIRN HOMES EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIRN HOMES EO 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 CAIRN HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIRN HOMES EO has no effect on the direction of Talanx AG i.e., Talanx AG and CAIRN HOMES go up and down completely randomly.
Pair Corralation between Talanx AG and CAIRN HOMES
Assuming the 90 days horizon Talanx AG is expected to generate 0.5 times more return on investment than CAIRN HOMES. However, Talanx AG is 1.98 times less risky than CAIRN HOMES. It trades about 0.1 of its potential returns per unit of risk. CAIRN HOMES EO is currently generating about -0.04 per unit of risk. If you would invest 8,370 in Talanx AG on October 15, 2024 and sell it today you would earn a total of 140.00 from holding Talanx AG or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. CAIRN HOMES EO
Performance |
| Timeline |
| Talanx AG |
| CAIRN HOMES EO |
Talanx AG and CAIRN HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and CAIRN HOMES
The main advantage of trading using opposite Talanx AG and CAIRN HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, CAIRN HOMES 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 CAIRN HOMES will offset losses from the drop in CAIRN HOMES's long position.| Talanx AG vs. Haverty Furniture Companies | Talanx AG vs. CRISPR Therapeutics AG | Talanx AG vs. Casio Computer CoLtd | Talanx AG vs. Addus HomeCare |
| CAIRN HOMES vs. QINGCI GAMES INC | CAIRN HOMES vs. Harmony Gold Mining | CAIRN HOMES vs. GigaMedia | CAIRN HOMES vs. Calibre Mining Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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