Correlation Between Talanx AG and AptarGroup

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

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

Diversification Opportunities for Talanx AG and AptarGroup

-0.81

Correlation Coefficient

Talanx AG  AptarGroup

Pay attention - limited upside

The 3 months correlation between Talanx and AptarGroup is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup 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 AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of Talanx AG i.e., Talanx AG and AptarGroup go up and down completely randomly.

Pair Corralation between Talanx AG and AptarGroup

Assuming the 90 days horizon Talanx AG is expected to generate 0.92 times more return on investment than AptarGroup. However, Talanx AG is 1.08 times less risky than AptarGroup. It trades about 0.23 of its potential returns per unit of risk. AptarGroup is currently generating about -0.09 per unit of risk. If you would invest  8,125  in Talanx AG on December 30, 2024 and sell it today you would earn a total of  1,715  from holding Talanx AG or generate 21.11% return on investment over 90 days.

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

Talanx AG  vs.  AptarGroup

Talanx AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Talanx AG are ranked lower than 18 (%) 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.

AptarGroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days AptarGroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Talanx AG and AptarGroup

The main advantage of trading using opposite Talanx AG and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, AptarGroup 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 AptarGroup will offset losses from the drop in AptarGroup's long position.

The idea behind Talanx AG and AptarGroup 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.