Correlation Between Hannover Rück and Münchener Rück
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By analyzing existing cross correlation between Hannover Rck SE and Mnchener Rck AG, you can compare the effects of market volatilities on Hannover Rück and Münchener Rück 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 Hannover Rück with a short position of Münchener Rück. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannover Rück and Münchener Rück.
Diversification Opportunities for Hannover Rück and Münchener Rück
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hannover and Münchener is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hannover Rck SE and Mnchener Rck AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnchener Rck AG and Hannover Rück 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 Hannover Rck SE are associated (or correlated) with Münchener Rück. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnchener Rck AG has no effect on the direction of Hannover Rück i.e., Hannover Rück and Münchener Rück go up and down completely randomly.
Pair Corralation between Hannover Rück and Münchener Rück
Assuming the 90 days trading horizon Hannover Rück is expected to generate 2.43 times less return on investment than Münchener Rück. In addition to that, Hannover Rück is 1.33 times more volatile than Mnchener Rck AG. It trades about 0.05 of its total potential returns per unit of risk. Mnchener Rck AG is currently generating about 0.15 per unit of volatility. If you would invest 47,650 in Mnchener Rck AG on August 28, 2024 and sell it today you would earn a total of 1,350 from holding Mnchener Rck AG or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannover Rck SE vs. Mnchener Rck AG
Performance |
| Timeline |
| Hannover Rck SE |
| Mnchener Rck AG |
Hannover Rück and Münchener Rück Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannover Rück and Münchener Rück
The main advantage of trading using opposite Hannover Rück and Münchener Rück positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannover Rück position performs unexpectedly, Münchener Rück 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 Rück will offset losses from the drop in Münchener Rück's long position.| Hannover Rück vs. Varta AG | Hannover Rück vs. AGRICUL BK CHINA H | Hannover Rück vs. Nine Dragons Paper | Hannover Rück vs. CAL MAINE FOODS |
| Münchener Rück vs. Varta AG | Münchener Rück vs. AGRICUL BK CHINA H | Münchener Rück vs. Nine Dragons Paper | Münchener Rück vs. CAL MAINE FOODS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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