Correlation Between Talanx AG and PUMA SE
Can any of the company-specific risk be diversified away by investing in both Talanx AG and PUMA SE 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 PUMA SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and PUMA SE, you can compare the effects of market volatilities on Talanx AG and PUMA SE 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 PUMA SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and PUMA SE.
Diversification Opportunities for Talanx AG and PUMA SE
Significant diversification
The 3 months correlation between Talanx and PUMA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and PUMA SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUMA SE 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 PUMA SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUMA SE has no effect on the direction of Talanx AG i.e., Talanx AG and PUMA SE go up and down completely randomly.
Pair Corralation between Talanx AG and PUMA SE
Assuming the 90 days horizon Talanx AG is expected to generate 0.56 times more return on investment than PUMA SE. However, Talanx AG is 1.77 times less risky than PUMA SE. It trades about 0.09 of its potential returns per unit of risk. PUMA SE is currently generating about 0.0 per unit of risk. If you would invest 5,117 in Talanx AG on September 4, 2024 and sell it today you would earn a total of 2,848 from holding Talanx AG or generate 55.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Talanx AG vs. PUMA SE
Performance |
| Timeline |
| Talanx AG |
| PUMA SE |
Talanx AG and PUMA SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and PUMA SE
The main advantage of trading using opposite Talanx AG and PUMA SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, PUMA SE 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 PUMA SE will offset losses from the drop in PUMA SE's long position.| Talanx AG vs. BJs Wholesale Club | Talanx AG vs. American Eagle Outfitters | Talanx AG vs. AEON STORES | Talanx AG vs. URBAN OUTFITTERS |
| PUMA SE vs. GREENX METALS LTD | PUMA SE vs. China Resources Beer | PUMA SE vs. Lion One Metals | PUMA SE vs. National Beverage 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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