Correlation Between Greenlight Capital and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both Greenlight Capital 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 Greenlight Capital and Reinsurance Group 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 Reinsurance Group of, you can compare the effects of market volatilities on Greenlight Capital 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 Greenlight Capital with a short position of Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlight Capital and Reinsurance Group.
Diversification Opportunities for Greenlight Capital and Reinsurance Group
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greenlight and Reinsurance is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Greenlight Capital Re and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group 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 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 Greenlight Capital i.e., Greenlight Capital and Reinsurance Group go up and down completely randomly.
Pair Corralation between Greenlight Capital and Reinsurance Group
Given the investment horizon of 90 days Greenlight Capital Re is expected to generate 0.58 times more return on investment than Reinsurance Group. However, Greenlight Capital Re is 1.72 times less risky than Reinsurance Group. It trades about -0.13 of its potential returns per unit of risk. Reinsurance Group of is currently generating about -0.19 per unit of risk. If you would invest 1,412 in Greenlight Capital Re on November 18, 2024 and sell it today you would lose (60.00) from holding Greenlight Capital Re or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenlight Capital Re vs. Reinsurance Group of
Performance |
| Timeline |
| Greenlight Capital |
| Reinsurance Group |
Greenlight Capital and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenlight Capital and Reinsurance Group
The main advantage of trading using opposite Greenlight Capital and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlight Capital 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.| Greenlight Capital vs. Reinsurance Group of | Greenlight Capital vs. Siriuspoint | Greenlight Capital vs. SCOR PK | Greenlight Capital vs. SiriusPoint |
| Reinsurance Group vs. Maiden Holdings | Reinsurance Group vs. Greenlight Capital Re | Reinsurance Group vs. RenaissanceRe Holdings | Reinsurance Group vs. Renaissancere Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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