Correlation Between Talanx AG and Goldman Sachs

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Talanx AG and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and The Goldman Sachs, you can compare the effects of market volatilities on Talanx AG and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Goldman Sachs.

Diversification Opportunities for Talanx AG and Goldman Sachs

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Talanx and Goldman is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of Talanx AG i.e., Talanx AG and Goldman Sachs go up and down completely randomly.

Pair Corralation between Talanx AG and Goldman Sachs

Assuming the 90 days horizon Talanx AG is expected to generate 0.83 times more return on investment than Goldman Sachs. However, Talanx AG is 1.2 times less risky than Goldman Sachs. It trades about 0.11 of its potential returns per unit of risk. The Goldman Sachs is currently generating about 0.08 per unit of risk. If you would invest  4,135  in Talanx AG on October 5, 2024 and sell it today you would earn a total of  3,990  from holding Talanx AG or generate 96.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Talanx AG  vs.  The Goldman Sachs

 Performance 
       Timeline  
Talanx AG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Goldman Sachs 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Good
Over the last 90 days The Goldman Sachs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Goldman Sachs reported solid returns over the last few months and may actually be approaching a breakup point.

Talanx AG and Goldman Sachs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Talanx AG and Goldman Sachs

The main advantage of trading using opposite Talanx AG and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.
The idea behind Talanx AG and The Goldman Sachs 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

Other Complementary Tools

Fundamental Analysis
View fundamental data based on most recent published financial statements
Money Managers
Screen money managers from public funds and ETFs managed around the world
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas