Correlation Between CTS Eventim and Talanx AG

Can any of the company-specific risk be diversified away by investing in both CTS Eventim 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 CTS Eventim and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTS Eventim AG and Talanx AG, you can compare the effects of market volatilities on CTS Eventim 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 CTS Eventim with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS Eventim and Talanx AG.

Diversification Opportunities for CTS Eventim and Talanx AG

0.59

Correlation Coefficient

CTS Eventim  Talanx AG

Very weak diversification

The 3 months correlation between CTS and Talanx is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and CTS Eventim 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 CTS Eventim AG 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 CTS Eventim i.e., CTS Eventim and Talanx AG go up and down completely randomly.

Pair Corralation between CTS Eventim and Talanx AG

Assuming the 90 days trading horizon CTS Eventim AG is expected to generate 1.08 times more return on investment than Talanx AG. However, CTS Eventim is 1.08 times more volatile than Talanx AG. It trades about 0.23 of its potential returns per unit of risk. Talanx AG is currently generating about 0.22 per unit of risk. If you would invest  8,255  in CTS Eventim AG on December 22, 2024 and sell it today you would earn a total of  1,755  from holding CTS Eventim AG or generate 21.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CTS Eventim AG  vs.  Talanx AG

CTS Eventim AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Eventim AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, CTS Eventim unveiled solid returns over the last few months and may actually be approaching a breakup point.

Talanx AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Talanx AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Talanx AG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CTS Eventim and Talanx AG

The main advantage of trading using opposite CTS Eventim and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS Eventim 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 CTS Eventim AG 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.