Correlation Between ENN Energy and Talanx AG
Can any of the company-specific risk be diversified away by investing in both ENN Energy and Talanx AG 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 ENN Energy and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENN Energy Holdings and Talanx AG, you can compare the effects of market volatilities on ENN Energy and Talanx AG 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 ENN Energy with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and Talanx AG.
Diversification Opportunities for ENN Energy and Talanx AG
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between ENN and Talanx is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and ENN Energy 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 ENN Energy Holdings are associated (or correlated) with Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of ENN Energy i.e., ENN Energy and Talanx AG go up and down completely randomly.
Pair Corralation between ENN Energy and Talanx AG
Assuming the 90 days trading horizon ENN Energy Holdings is expected to generate 2.62 times more return on investment than Talanx AG. However, ENN Energy is 2.62 times more volatile than Talanx AG. It trades about 0.07 of its potential returns per unit of risk. Talanx AG is currently generating about 0.07 per unit of risk. If you would invest 370.00 in ENN Energy Holdings on September 4, 2024 and sell it today you would earn a total of 255.00 from holding ENN Energy Holdings or generate 68.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
ENN Energy Holdings vs. Talanx AG
Performance |
| Timeline |
| ENN Energy Holdings |
| Talanx AG |
ENN Energy and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENN Energy and Talanx AG
The main advantage of trading using opposite ENN Energy and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENN Energy position performs unexpectedly, Talanx AG 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 Talanx AG will offset losses from the drop in Talanx AG's long position.| ENN Energy vs. Evolution Mining Limited | ENN Energy vs. Sterling Construction | ENN Energy vs. ADRIATIC METALS LS 013355 | ENN Energy vs. VIVA WINE GROUP |
| Talanx AG vs. BJs Wholesale Club | Talanx AG vs. American Eagle Outfitters | Talanx AG vs. AEON STORES | Talanx AG vs. URBAN OUTFITTERS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |