Correlation Between Talanx AG and Guangzhou Baiyunshan
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Guangzhou Baiyunshan 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 Guangzhou Baiyunshan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Guangzhou Baiyunshan Pharmaceutical, you can compare the effects of market volatilities on Talanx AG and Guangzhou Baiyunshan 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 Guangzhou Baiyunshan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Guangzhou Baiyunshan.
Diversification Opportunities for Talanx AG and Guangzhou Baiyunshan
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Talanx and Guangzhou is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Guangzhou Baiyunshan Pharmaceu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Baiyunshan 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 Guangzhou Baiyunshan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Baiyunshan has no effect on the direction of Talanx AG i.e., Talanx AG and Guangzhou Baiyunshan go up and down completely randomly.
Pair Corralation between Talanx AG and Guangzhou Baiyunshan
Assuming the 90 days horizon Talanx AG is expected to generate 1.07 times more return on investment than Guangzhou Baiyunshan. However, Talanx AG is 1.07 times more volatile than Guangzhou Baiyunshan Pharmaceutical. It trades about 0.1 of its potential returns per unit of risk. Guangzhou Baiyunshan Pharmaceutical is currently generating about -0.17 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. Guangzhou Baiyunshan Pharmaceu
Performance |
| Timeline |
| Talanx AG |
| Guangzhou Baiyunshan |
Talanx AG and Guangzhou Baiyunshan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Guangzhou Baiyunshan
The main advantage of trading using opposite Talanx AG and Guangzhou Baiyunshan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Guangzhou Baiyunshan 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 Guangzhou Baiyunshan will offset losses from the drop in Guangzhou Baiyunshan's long position.| Talanx AG vs. Mitsubishi Materials | Talanx AG vs. WIMFARM SA EO | Talanx AG vs. APPLIED MATERIALS | Talanx AG vs. Federal Agricultural Mortgage |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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