Correlation Between Talanx AG and SES SA

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

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

Diversification Opportunities for Talanx AG and SES SA

-0.72

Correlation Coefficient

Talanx AG  SES SA

Pay attention - limited upside

The 3 months correlation between Talanx and SES is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of Talanx AG i.e., Talanx AG and SES SA go up and down completely randomly.

Pair Corralation between Talanx AG and SES SA

Assuming the 90 days horizon Talanx AG is expected to generate 0.68 times more return on investment than SES SA. However, Talanx AG is 1.48 times less risky than SES SA. It trades about 0.01 of its potential returns per unit of risk. SES SA is currently generating about -0.09 per unit of risk. If you would invest  8,125  in Talanx AG on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Talanx AG or generate 0.0% return on investment over 90 days.

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

Talanx AG  vs.  SES SA

Talanx AG

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Talanx AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Talanx AG may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Pair Trading with Talanx AG and SES SA

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

The idea behind Talanx AG and SES SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.