Correlation Between Data Modul and TAL Education

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

By analyzing existing cross correlation between Data Modul AG and TAL Education Group, you can compare the effects of market volatilities on Data Modul and TAL Education 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 Data Modul with a short position of TAL Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Modul and TAL Education.

Diversification Opportunities for Data Modul and TAL Education

0.18

Correlation Coefficient

Data Modul  TAL Education

Average diversification

The 3 months correlation between Data and TAL is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG and TAL Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAL Education Group and Data Modul 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 Data Modul AG are associated (or correlated) with TAL Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAL Education Group has no effect on the direction of Data Modul i.e., Data Modul and TAL Education go up and down completely randomly.

Pair Corralation between Data Modul and TAL Education

Assuming the 90 days trading horizon Data Modul is expected to generate 1.02 times less return on investment than TAL Education. But when comparing it to its historical volatility, Data Modul AG is 1.2 times less risky than TAL Education. It trades about 0.09 of its potential returns per unit of risk. TAL Education Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  785.00  in TAL Education Group on May 2, 2025 and sell it today you would earn a total of  85.00  from holding TAL Education Group or generate 10.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Data Modul AG  vs.  TAL Education Group

Data Modul AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Data Modul AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, Data Modul may actually be approaching a critical reversion point that can send shares even higher in August 2025.

TAL Education Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TAL Education Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, TAL Education may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Data Modul and TAL Education

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

The idea behind Data Modul AG and TAL Education Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.