Correlation Between Maiden Holdings and Hannover
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings and Hannover 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 Hannover into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Hannover Re, you can compare the effects of market volatilities on Maiden Holdings and Hannover 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 Hannover. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Hannover.
Diversification Opportunities for Maiden Holdings and Hannover
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maiden and Hannover is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Hannover Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannover Re 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 Hannover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannover Re has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Hannover go up and down completely randomly.
Pair Corralation between Maiden Holdings and Hannover
Given the investment horizon of 90 days Maiden Holdings is expected to under-perform the Hannover. In addition to that, Maiden Holdings is 5.59 times more volatile than Hannover Re. It trades about -0.06 of its total potential returns per unit of risk. Hannover Re is currently generating about 0.07 per unit of volatility. If you would invest 4,323 in Hannover Re on November 2, 2024 and sell it today you would earn a total of 203.00 from holding Hannover Re or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maiden Holdings vs. Hannover Re
Performance |
| Timeline |
| Maiden Holdings |
| Hannover Re |
Maiden Holdings and Hannover Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Hannover
The main advantage of trading using opposite Maiden Holdings and Hannover positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings position performs unexpectedly, Hannover 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 Hannover will offset losses from the drop in Hannover's long position.| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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