Correlation Between Talanx AG and Yihai International
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Yihai International 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 Yihai International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Yihai International Holding, you can compare the effects of market volatilities on Talanx AG and Yihai International 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 Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Yihai International.
Diversification Opportunities for Talanx AG and Yihai International
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Talanx and Yihai is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai International 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 Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of Talanx AG i.e., Talanx AG and Yihai International go up and down completely randomly.
Pair Corralation between Talanx AG and Yihai International
Assuming the 90 days horizon Talanx AG is expected to generate 0.43 times more return on investment than Yihai International. However, Talanx AG is 2.32 times less risky than Yihai International. It trades about -0.08 of its potential returns per unit of risk. Yihai International Holding is currently generating about -0.26 per unit of risk. If you would invest 8,550 in Talanx AG on October 11, 2024 and sell it today you would lose (170.00) from holding Talanx AG or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. Yihai International Holding
Performance |
| Timeline |
| Talanx AG |
| Yihai International |
Talanx AG and Yihai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Yihai International
The main advantage of trading using opposite Talanx AG and Yihai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Yihai International 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 Yihai International will offset losses from the drop in Yihai International's long position.| Talanx AG vs. Shenandoah Telecommunications | Talanx AG vs. International Game Technology | Talanx AG vs. GMO Internet | Talanx AG vs. BRAGG GAMING GRP |
| Yihai International vs. COFCO Joycome Foods | Yihai International vs. SENECA FOODS A | Yihai International vs. MCEWEN MINING INC | Yihai International vs. EBRO FOODS |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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