Correlation Between Hannover and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Hannover and Maiden Holdings 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 Hannover and Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannover Re and Maiden Holdings, you can compare the effects of market volatilities on Hannover and Maiden Holdings 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 with a short position of Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannover and Maiden Holdings.
Diversification Opportunities for Hannover and Maiden Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hannover and Maiden is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hannover Re and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings and Hannover 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 Re are associated (or correlated) with Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Hannover i.e., Hannover and Maiden Holdings go up and down completely randomly.
Pair Corralation between Hannover and Maiden Holdings
Assuming the 90 days horizon Hannover Re is expected to under-perform the Maiden Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hannover Re is 4.19 times less risky than Maiden Holdings. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Maiden Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 164.00 in Maiden Holdings on August 27, 2024 and sell it today you would earn a total of 2.00 from holding Maiden Holdings or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannover Re vs. Maiden Holdings
Performance |
| Timeline |
| Hannover Re |
| Maiden Holdings |
Hannover and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannover and Maiden Holdings
The main advantage of trading using opposite Hannover and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannover position performs unexpectedly, Maiden Holdings 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Hannover vs. Maiden Holdings | Hannover vs. Renaissancere Holdings | Hannover vs. Greenlight Capital Re | Hannover vs. Reinsurance Group of |
| Maiden Holdings vs. Siriuspoint | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Oxbridge Re Holdings | Maiden Holdings vs. Greenlight Capital Re |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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