Correlation Between Greenlight Capital and Mnchener Rckversicherungs
Can any of the company-specific risk be diversified away by investing in both Greenlight Capital and Mnchener Rckversicherungs 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 Greenlight Capital and Mnchener Rckversicherungs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenlight Capital Re and Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft, you can compare the effects of market volatilities on Greenlight Capital and Mnchener Rckversicherungs 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 Greenlight Capital with a short position of Mnchener Rckversicherungs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlight Capital and Mnchener Rckversicherungs.
Diversification Opportunities for Greenlight Capital and Mnchener Rckversicherungs
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greenlight and Mnchener is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Greenlight Capital Re and Mnchener Rckversicherungs Gese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnchener Rckversicherungs and Greenlight Capital 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 Greenlight Capital Re are associated (or correlated) with Mnchener Rckversicherungs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnchener Rckversicherungs has no effect on the direction of Greenlight Capital i.e., Greenlight Capital and Mnchener Rckversicherungs go up and down completely randomly.
Pair Corralation between Greenlight Capital and Mnchener Rckversicherungs
Given the investment horizon of 90 days Greenlight Capital is expected to generate 4.77 times less return on investment than Mnchener Rckversicherungs. But when comparing it to its historical volatility, Greenlight Capital Re is 1.62 times less risky than Mnchener Rckversicherungs. It trades about 0.06 of its potential returns per unit of risk. Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 50,675 in Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft on September 12, 2024 and sell it today you would earn a total of 2,123 from holding Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Greenlight Capital Re vs. Mnchener Rckversicherungs Gese
Performance |
| Timeline |
| Greenlight Capital |
| Mnchener Rckversicherungs |
Greenlight Capital and Mnchener Rckversicherungs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenlight Capital and Mnchener Rckversicherungs
The main advantage of trading using opposite Greenlight Capital and Mnchener Rckversicherungs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlight Capital position performs unexpectedly, Mnchener Rckversicherungs 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 Mnchener Rckversicherungs will offset losses from the drop in Mnchener Rckversicherungs' long position.| Greenlight Capital vs. Reinsurance Group of | Greenlight Capital vs. Siriuspoint | Greenlight Capital vs. SCOR PK | Greenlight Capital vs. SiriusPoint |
| Mnchener Rckversicherungs vs. Maiden Holdings | Mnchener Rckversicherungs vs. Renaissancere Holdings | Mnchener Rckversicherungs vs. Greenlight Capital Re | Mnchener Rckversicherungs vs. Reinsurance Group of |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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