Correlation Between Mnchener Rckversicherungs and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mnchener Rckversicherungs and Dow Jones 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 Mnchener Rckversicherungs and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft and Dow Jones Industrial, you can compare the effects of market volatilities on Mnchener Rckversicherungs and Dow Jones 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 Mnchener Rckversicherungs with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnchener Rckversicherungs and Dow Jones.
Diversification Opportunities for Mnchener Rckversicherungs and Dow Jones
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mnchener and Dow is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mnchener Rckversicherungs Gese and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Mnchener Rckversicherungs 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 Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Mnchener Rckversicherungs i.e., Mnchener Rckversicherungs and Dow Jones go up and down completely randomly.
Pair Corralation between Mnchener Rckversicherungs and Dow Jones
Assuming the 90 days horizon Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is expected to generate 3.36 times more return on investment than Dow Jones. However, Mnchener Rckversicherungs is 3.36 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 29,628 in Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft on September 12, 2024 and sell it today you would earn a total of 23,170 from holding Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft or generate 78.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.12% |
| Values | Daily Returns |
Mnchener Rckversicherungs Gese vs. Dow Jones Industrial
Performance |
| Timeline |
Mnchener Rckversicherungs and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft
Pair trading matchups for Mnchener Rckversicherungs
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mnchener Rckversicherungs and Dow Jones
The main advantage of trading using opposite Mnchener Rckversicherungs and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnchener Rckversicherungs position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Mnchener Rckversicherungs vs. Maiden Holdings | Mnchener Rckversicherungs vs. Renaissancere Holdings | Mnchener Rckversicherungs vs. Greenlight Capital Re | Mnchener Rckversicherungs vs. Reinsurance Group of |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |