Correlation Between Maiden Holdings and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings 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 Maiden Holdings and Reinsurance Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Reinsurance Group of, you can compare the effects of market volatilities on Maiden Holdings 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 Maiden Holdings with a short position of Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Reinsurance Group.
Diversification Opportunities for Maiden Holdings and Reinsurance Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Maiden and Reinsurance is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group and Maiden Holdings 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 Maiden Holdings 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 Maiden Holdings i.e., Maiden Holdings and Reinsurance Group go up and down completely randomly.
Pair Corralation between Maiden Holdings and Reinsurance Group
Given the investment horizon of 90 days Maiden Holdings is expected to under-perform the Reinsurance Group. In addition to that, Maiden Holdings is 5.89 times more volatile than Reinsurance Group of. It trades about -0.06 of its total potential returns per unit of risk. Reinsurance Group of is currently generating about 0.05 per unit of volatility. If you would invest 2,495 in Reinsurance Group of on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Reinsurance Group of or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maiden Holdings vs. Reinsurance Group of
Performance |
| Timeline |
| Maiden Holdings |
| Reinsurance Group |
Maiden Holdings and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Reinsurance Group
The main advantage of trading using opposite Maiden Holdings and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings 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.| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
| Reinsurance Group vs. Southern Co | Reinsurance Group vs. Stifel Financial | Reinsurance Group vs. Entergy New Orleans | Reinsurance Group vs. Entergy Arkansas LLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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