Correlation Between Greenlight Capital and Münchener Rückversicherung
Can any of the company-specific risk be diversified away by investing in both Greenlight Capital and Münchener Rückversicherung 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 Münchener Rückversicherung 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 Münchener Rückversicherung 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 Münchener Rückversicherung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlight Capital and Münchener Rückversicherung.
Diversification Opportunities for Greenlight Capital and Münchener Rückversicherung
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greenlight and Münchener is -0.43. 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 Münchener Rückversicherung 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 Münchener Rückversicherung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Münchener Rückversicherung has no effect on the direction of Greenlight Capital i.e., Greenlight Capital and Münchener Rückversicherung go up and down completely randomly.
Pair Corralation between Greenlight Capital and Münchener Rückversicherung
Given the investment horizon of 90 days Greenlight Capital Re is expected to generate 1.8 times more return on investment than Münchener Rückversicherung. However, Greenlight Capital is 1.8 times more volatile than Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft. It trades about 0.21 of its potential returns per unit of risk. Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is currently generating about 0.06 per unit of risk. If you would invest 1,356 in Greenlight Capital Re on September 4, 2024 and sell it today you would earn a total of 147.00 from holding Greenlight Capital Re or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenlight Capital Re vs. Mnchener Rckversicherungs Gese
Performance |
| Timeline |
| Greenlight Capital |
| Münchener Rückversicherung |
Greenlight Capital and Münchener Rückversicherung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenlight Capital and Münchener Rückversicherung
The main advantage of trading using opposite Greenlight Capital and Münchener Rückversicherung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlight Capital position performs unexpectedly, Münchener Rückversicherung 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 Münchener Rückversicherung will offset losses from the drop in Münchener Rückversicherung's long position.| Greenlight Capital vs. Reinsurance Group of | Greenlight Capital vs. Siriuspoint | Greenlight Capital vs. SCOR PK | Greenlight Capital vs. SiriusPoint |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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