Correlation Between Talanx AG and US Foods
Can any of the company-specific risk be diversified away by investing in both Talanx AG and US Foods 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 US Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and US Foods Holding, you can compare the effects of market volatilities on Talanx AG and US Foods 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 US Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and US Foods.
Diversification Opportunities for Talanx AG and US Foods
Very poor diversification
The 3 months correlation between Talanx and UFH is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and US Foods Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Foods Holding 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 US Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Foods Holding has no effect on the direction of Talanx AG i.e., Talanx AG and US Foods go up and down completely randomly.
Pair Corralation between Talanx AG and US Foods
Assuming the 90 days horizon Talanx AG is expected to generate 0.89 times more return on investment than US Foods. However, Talanx AG is 1.13 times less risky than US Foods. It trades about 0.11 of its potential returns per unit of risk. US Foods Holding is currently generating about 0.09 per unit of risk. If you would invest 4,266 in Talanx AG on October 13, 2024 and sell it today you would earn a total of 4,234 from holding Talanx AG or generate 99.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. US Foods Holding
Performance |
| Timeline |
| Talanx AG |
| US Foods Holding |
Talanx AG and US Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and US Foods
The main advantage of trading using opposite Talanx AG and US Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, US Foods 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 US Foods will offset losses from the drop in US Foods' long position.| Talanx AG vs. Hochschild Mining plc | Talanx AG vs. Siemens Healthineers AG | Talanx AG vs. Acadia Healthcare | Talanx AG vs. BRAGG GAMING GRP |
| US Foods vs. Superior Plus Corp | US Foods vs. NMI Holdings | US Foods vs. SIVERS SEMICONDUCTORS AB | US Foods vs. Talanx AG |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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