Correlation Between Talanx AG and Kering SA
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Kering SA 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 Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Kering SA, you can compare the effects of market volatilities on Talanx AG and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Kering SA.
Diversification Opportunities for Talanx AG and Kering SA
Good diversification
The 3 months correlation between Talanx and Kering is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Talanx AG i.e., Talanx AG and Kering SA go up and down completely randomly.
Pair Corralation between Talanx AG and Kering SA
Assuming the 90 days horizon Talanx AG is expected to generate 0.68 times more return on investment than Kering SA. However, Talanx AG is 1.48 times less risky than Kering SA. It trades about 0.1 of its potential returns per unit of risk. Kering SA is currently generating about -0.07 per unit of risk. If you would invest 4,054 in Talanx AG on September 3, 2024 and sell it today you would earn a total of 3,911 from holding Talanx AG or generate 96.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. Kering SA
Performance |
| Timeline |
| Talanx AG |
| Kering SA |
Talanx AG and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Kering SA
The main advantage of trading using opposite Talanx AG and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Talanx AG vs. Gamma Communications plc | Talanx AG vs. GALENA MINING LTD | Talanx AG vs. Jacquet Metal Service | Talanx AG vs. COMBA TELECOM SYST |
| Kering SA vs. Goosehead Insurance | Kering SA vs. CSSC Offshore Marine | Kering SA vs. LIFENET INSURANCE CO | Kering SA vs. BW OFFSHORE LTD |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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