Correlation Between Talanx AG and Grupo Carso

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

Diversification Opportunities for Talanx AG and Grupo Carso

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Talanx and Grupo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Talanx AG i.e., Talanx AG and Grupo Carso go up and down completely randomly.

Pair Corralation between Talanx AG and Grupo Carso

Assuming the 90 days horizon Talanx AG is expected to generate 1.2 times more return on investment than Grupo Carso. However, Talanx AG is 1.2 times more volatile than Grupo Carso SAB. It trades about -0.01 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about -0.54 per unit of risk. If you would invest  8,155  in Talanx AG on October 5, 2024 and sell it today you would lose (30.00) from holding Talanx AG or give up 0.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Talanx AG  vs.  Grupo Carso SAB

 Performance 
       Timeline  
Talanx AG 

Risk-Adjusted Performance

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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.
Grupo Carso SAB 

Risk-Adjusted Performance

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Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Talanx AG and Grupo Carso Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Talanx AG and Grupo Carso

The main advantage of trading using opposite Talanx AG and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.
The idea behind Talanx AG and Grupo Carso SAB 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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