Correlation Between MENSCH UND and Targa Resources

Can any of the company-specific risk be diversified away by investing in both MENSCH UND and Targa Resources 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 MENSCH UND and Targa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MENSCH UND MASCHINE and Targa Resources Corp, you can compare the effects of market volatilities on MENSCH UND and Targa Resources 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 MENSCH UND with a short position of Targa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MENSCH UND and Targa Resources.

Diversification Opportunities for MENSCH UND and Targa Resources

-0.48

Correlation Coefficient

MENSCH UND  Targa Resources

Very good diversification

The 3 months correlation between MENSCH and Targa is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MENSCH UND MASCHINE and Targa Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Targa Resources Corp and MENSCH UND 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 MENSCH UND MASCHINE are associated (or correlated) with Targa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Targa Resources Corp has no effect on the direction of MENSCH UND i.e., MENSCH UND and Targa Resources go up and down completely randomly.

Pair Corralation between MENSCH UND and Targa Resources

Assuming the 90 days trading horizon MENSCH UND is expected to generate 5.42 times less return on investment than Targa Resources. But when comparing it to its historical volatility, MENSCH UND MASCHINE is 1.13 times less risky than Targa Resources. It trades about 0.02 of its potential returns per unit of risk. Targa Resources Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,139  in Targa Resources Corp on April 20, 2025 and sell it today you would earn a total of  7,561  from holding Targa Resources Corp or generate 105.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

MENSCH UND MASCHINE  vs.  Targa Resources Corp

MENSCH UND MASCHINE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MENSCH UND MASCHINE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, MENSCH UND may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Targa Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Targa Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Targa Resources is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MENSCH UND and Targa Resources

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

The idea behind MENSCH UND MASCHINE and Targa Resources Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.