Correlation Between ANGLO ASIAN and Talanx AG

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Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN 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 ANGLO ASIAN and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and Talanx AG, you can compare the effects of market volatilities on ANGLO ASIAN 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 ANGLO ASIAN with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and Talanx AG.

Diversification Opportunities for ANGLO ASIAN and Talanx AG

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between ANGLO and Talanx is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and ANGLO ASIAN 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 ANGLO ASIAN MINING 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 ANGLO ASIAN i.e., ANGLO ASIAN and Talanx AG go up and down completely randomly.

Pair Corralation between ANGLO ASIAN and Talanx AG

Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to under-perform the Talanx AG. In addition to that, ANGLO ASIAN is 1.11 times more volatile than Talanx AG. It trades about -0.14 of its total potential returns per unit of risk. Talanx AG is currently generating about -0.04 per unit of volatility. If you would invest  8,395  in Talanx AG on October 9, 2024 and sell it today you would lose (75.00) from holding Talanx AG or give up 0.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ANGLO ASIAN MINING  vs.  Talanx AG

 Performance 
       Timeline  
ANGLO ASIAN MINING 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ANGLO ASIAN MINING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANGLO ASIAN is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Talanx AG 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Talanx AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Talanx AG unveiled solid returns over the last few months and may actually be approaching a breakup point.

ANGLO ASIAN and Talanx AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ANGLO ASIAN and Talanx AG

The main advantage of trading using opposite ANGLO ASIAN and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN 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.
The idea behind ANGLO ASIAN MINING and Talanx AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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