Correlation Between Talanx AG and T-Mobile

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

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

Diversification Opportunities for Talanx AG and T-Mobile

0.31

Correlation Coefficient

Talanx AG  T-Mobile

Weak diversification

The 3 months correlation between Talanx and T-Mobile is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T-Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Talanx AG i.e., Talanx AG and T-Mobile go up and down completely randomly.

Pair Corralation between Talanx AG and T-Mobile

Assuming the 90 days horizon Talanx AG is expected to generate 1.92 times less return on investment than T-Mobile. In addition to that, Talanx AG is 1.1 times more volatile than T Mobile. It trades about 0.06 of its total potential returns per unit of risk. T Mobile is currently generating about 0.13 per unit of volatility. If you would invest  12,687  in T Mobile on October 4, 2024 and sell it today you would earn a total of  8,798  from holding T Mobile or generate 69.35% return on investment over 90 days.

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

Talanx AG  vs.  T Mobile

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 unsteady basic indicators, Talanx AG may actually be approaching a critical reversion point that can send shares even higher in February 2025.

T Mobile

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, T-Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Talanx AG and T-Mobile

The main advantage of trading using opposite Talanx AG and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG position performs unexpectedly, T-Mobile 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 T-Mobile will offset losses from the drop in T-Mobile's long position.

The idea behind Talanx AG and T Mobile 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.