Correlation Between Talanx AG and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Talanx AG and SalMar ASA 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 SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and SalMar ASA, you can compare the effects of market volatilities on Talanx AG and SalMar ASA 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 SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and SalMar ASA.
Diversification Opportunities for Talanx AG and SalMar ASA
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Talanx and SalMar is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Talanx AG i.e., Talanx AG and SalMar ASA go up and down completely randomly.
Pair Corralation between Talanx AG and SalMar ASA
Assuming the 90 days horizon Talanx AG is expected to generate 0.72 times more return on investment than SalMar ASA. However, Talanx AG is 1.39 times less risky than SalMar ASA. It trades about 0.27 of its potential returns per unit of risk. SalMar ASA is currently generating about 0.05 per unit of risk. If you would invest 7,225 in Talanx AG on August 24, 2024 and sell it today you would earn a total of 575.00 from holding Talanx AG or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Talanx AG vs. SalMar ASA
Performance |
| Timeline |
| Talanx AG |
| SalMar ASA |
Talanx AG and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and SalMar ASA
The main advantage of trading using opposite Talanx AG and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| Talanx AG vs. Coeur Mining | Talanx AG vs. Harmony Gold Mining | Talanx AG vs. Apollo Investment Corp | Talanx AG vs. WisdomTree Investments |
| SalMar ASA vs. MACOM Technology Solutions | SalMar ASA vs. Algonquin Power Utilities | SalMar ASA vs. FANDIFI TECHNOLOGY P | SalMar ASA vs. AOYAMA TRADING |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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