Correlation Between Amcor Plc and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both Amcor Plc and Reinsurance Group 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 Amcor Plc and Reinsurance Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcor plc and Reinsurance Group of, you can compare the effects of market volatilities on Amcor Plc and Reinsurance Group 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 Amcor Plc with a short position of Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor Plc and Reinsurance Group.
Diversification Opportunities for Amcor Plc and Reinsurance Group
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amcor and Reinsurance is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Amcor plc and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group and Amcor Plc 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 Amcor plc are associated (or correlated) with Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of Amcor Plc i.e., Amcor Plc and Reinsurance Group go up and down completely randomly.
Pair Corralation between Amcor Plc and Reinsurance Group
Assuming the 90 days trading horizon Amcor Plc is expected to generate 1.99 times less return on investment than Reinsurance Group. In addition to that, Amcor Plc is 1.11 times more volatile than Reinsurance Group of. It trades about 0.1 of its total potential returns per unit of risk. Reinsurance Group of is currently generating about 0.22 per unit of volatility. If you would invest 20,200 in Reinsurance Group of on October 28, 2024 and sell it today you would earn a total of 1,200 from holding Reinsurance Group of or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amcor plc vs. Reinsurance Group of
Performance |
| Timeline |
| Amcor plc |
| Reinsurance Group |
Amcor Plc and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcor Plc and Reinsurance Group
The main advantage of trading using opposite Amcor Plc and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor Plc position performs unexpectedly, Reinsurance Group 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 Reinsurance Group will offset losses from the drop in Reinsurance Group's long position.| Amcor Plc vs. Amcor plc | Amcor Plc vs. Packaging of | Amcor Plc vs. Crown Holdings | Amcor Plc vs. Smurfit Kappa Group |
| Reinsurance Group vs. Solstad Offshore ASA | Reinsurance Group vs. SOLSTAD OFFSHORE NK | Reinsurance Group vs. Zijin Mining Group | Reinsurance Group vs. MAG SILVER |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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