Correlation Between Talanx AG and Equitable Holdings

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

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

Diversification Opportunities for Talanx AG and Equitable Holdings

-0.1

Correlation Coefficient

Talanx AG  Equitable Holdings

Good diversification

The 3 months correlation between Talanx and Equitable is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings 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 Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of Talanx AG i.e., Talanx AG and Equitable Holdings go up and down completely randomly.

Pair Corralation between Talanx AG and Equitable Holdings

Assuming the 90 days horizon Talanx AG is expected to generate 0.7 times more return on investment than Equitable Holdings. However, Talanx AG is 1.43 times less risky than Equitable Holdings. It trades about 0.22 of its potential returns per unit of risk. Equitable Holdings is currently generating about 0.06 per unit of risk. If you would invest  8,080  in Talanx AG on December 22, 2024 and sell it today you would earn a total of  1,510  from holding Talanx AG or generate 18.69% return on investment over 90 days.

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

Talanx AG  vs.  Equitable Holdings

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.

Equitable Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Equitable Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Equitable Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Talanx AG and Equitable Holdings

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

The idea behind Talanx AG and Equitable Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.