Correlation Between Mnchener Rckversicherungs and PICC Property
Can any of the company-specific risk be diversified away by investing in both Mnchener Rckversicherungs and PICC Property 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 PICC Property 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 PICC Property and, you can compare the effects of market volatilities on Mnchener Rckversicherungs and PICC Property 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 PICC Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnchener Rckversicherungs and PICC Property.
Diversification Opportunities for Mnchener Rckversicherungs and PICC Property
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mnchener and PICC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mnchener Rckversicherungs Gese and PICC Property and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICC Property 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 PICC Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICC Property has no effect on the direction of Mnchener Rckversicherungs i.e., Mnchener Rckversicherungs and PICC Property go up and down completely randomly.
Pair Corralation between Mnchener Rckversicherungs and PICC Property
Assuming the 90 days horizon Mnchener Rckversicherungs is expected to generate 4.39 times less return on investment than PICC Property. But when comparing it to its historical volatility, Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is 1.83 times less risky than PICC Property. It trades about 0.05 of its potential returns per unit of risk. PICC Property and is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,875 in PICC Property and on September 12, 2024 and sell it today you would earn a total of 1,465 from holding PICC Property and or generate 50.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mnchener Rckversicherungs Gese vs. PICC Property and
Performance |
| Timeline |
| Mnchener Rckversicherungs |
| PICC Property |
Mnchener Rckversicherungs and PICC Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mnchener Rckversicherungs and PICC Property
The main advantage of trading using opposite Mnchener Rckversicherungs and PICC Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnchener Rckversicherungs position performs unexpectedly, PICC Property 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 PICC Property will offset losses from the drop in PICC Property's long position.| Mnchener Rckversicherungs vs. Maiden Holdings | Mnchener Rckversicherungs vs. Renaissancere Holdings | Mnchener Rckversicherungs vs. Greenlight Capital Re | Mnchener Rckversicherungs vs. Reinsurance Group of |
| PICC Property vs. Anhui Conch Cement | PICC Property vs. China Overseas Land | PICC Property vs. China Shenhua Energy | PICC Property vs. ENN Energy Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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