Correlation Between Maiden Holdings and Münchener Rückversicherung
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings and Münchener Rückversicherung 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 Münchener Rückversicherung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft, you can compare the effects of market volatilities on Maiden Holdings and Münchener Rückversicherung 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 Münchener Rückversicherung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Münchener Rückversicherung.
Diversification Opportunities for Maiden Holdings and Münchener Rückversicherung
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Maiden and Münchener is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Mnchener Rckversicherungs Gese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Münchener Rückversicherung 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 Münchener Rückversicherung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Münchener Rückversicherung has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Münchener Rückversicherung go up and down completely randomly.
Pair Corralation between Maiden Holdings and Münchener Rückversicherung
Given the investment horizon of 90 days Maiden Holdings is expected to generate 3.79 times more return on investment than Münchener Rückversicherung. However, Maiden Holdings is 3.79 times more volatile than Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft. It trades about 0.07 of its potential returns per unit of risk. Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is currently generating about 0.14 per unit of risk. If you would invest 156.00 in Maiden Holdings on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Maiden Holdings or generate 4.49% 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. Mnchener Rckversicherungs Gese
Performance |
| Timeline |
| Maiden Holdings |
| Münchener Rückversicherung |
Maiden Holdings and Münchener Rückversicherung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Münchener Rückversicherung
The main advantage of trading using opposite Maiden Holdings and Münchener Rückversicherung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings position performs unexpectedly, Münchener Rückversicherung 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 Rückversicherung will offset losses from the drop in Münchener Rückversicherung'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 |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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