Correlation Between Intuit and Talanx AG

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

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

Diversification Opportunities for Intuit and Talanx AG

0.57

Correlation Coefficient

Intuit  Talanx AG

Very weak diversification

The 3 months correlation between Intuit and Talanx is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Intuit 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 Intuit Inc 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 Intuit i.e., Intuit and Talanx AG go up and down completely randomly.

Pair Corralation between Intuit and Talanx AG

Assuming the 90 days horizon Intuit Inc is expected to generate 0.98 times more return on investment than Talanx AG. However, Intuit Inc is 1.02 times less risky than Talanx AG. It trades about 0.01 of its potential returns per unit of risk. Talanx AG is currently generating about -0.01 per unit of risk. If you would invest  61,300  in Intuit Inc on October 5, 2024 and sell it today you would earn a total of  60.00  from holding Intuit Inc or generate 0.1% return on investment over 90 days.

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

Intuit Inc  vs.  Talanx AG

Intuit Inc

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Intuit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Talanx AG

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Talanx AG has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Intuit and Talanx AG

The main advantage of trading using opposite Intuit and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuit 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 Intuit Inc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.