Correlation Between Talanx AG and General Mills
Can any of the company-specific risk be diversified away by investing in both Talanx AG and General Mills 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 General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and General Mills, you can compare the effects of market volatilities on Talanx AG and General Mills 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 General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and General Mills.
Diversification Opportunities for Talanx AG and General Mills
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Talanx and General is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills 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 General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of Talanx AG i.e., Talanx AG and General Mills go up and down completely randomly.
Pair Corralation between Talanx AG and General Mills
Assuming the 90 days horizon Talanx AG is expected to generate 1.21 times more return on investment than General Mills. However, Talanx AG is 1.21 times more volatile than General Mills. It trades about 0.08 of its potential returns per unit of risk. General Mills is currently generating about 0.04 per unit of risk. If you would invest 6,413 in Talanx AG on September 1, 2024 and sell it today you would earn a total of 1,522 from holding Talanx AG or generate 23.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.48% |
| Values | Daily Returns |
Talanx AG vs. General Mills
Performance |
| Timeline |
| Talanx AG |
| General Mills |
Talanx AG and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and General Mills
The main advantage of trading using opposite Talanx AG and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' long position.| Talanx AG vs. Retail Estates NV | Talanx AG vs. COMMERCIAL VEHICLE | Talanx AG vs. Geely Automobile Holdings | Talanx AG vs. Commercial Vehicle Group |
| General Mills vs. Danone SA | General Mills vs. Superior Plus Corp | General Mills vs. NMI Holdings | General Mills 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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