Correlation Between Münchener Rückversicherung and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Münchener Rückversicherung and Swiss Life 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 Münchener Rückversicherung and Swiss Life 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 Swiss Life Holding, you can compare the effects of market volatilities on Münchener Rückversicherung and Swiss Life 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 Münchener Rückversicherung with a short position of Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Münchener Rückversicherung and Swiss Life.
Diversification Opportunities for Münchener Rückversicherung and Swiss Life
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Münchener and Swiss is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mnchener Rckversicherungs Gese and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding and Münchener Rückversicherung 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 Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Münchener Rückversicherung i.e., Münchener Rückversicherung and Swiss Life go up and down completely randomly.
Pair Corralation between Münchener Rückversicherung and Swiss Life
Assuming the 90 days horizon Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is expected to generate 1.48 times more return on investment than Swiss Life. However, Münchener Rückversicherung is 1.48 times more volatile than Swiss Life Holding. It trades about 0.06 of its potential returns per unit of risk. Swiss Life Holding is currently generating about 0.08 per unit of risk. If you would invest 30,560 in Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft on September 2, 2024 and sell it today you would earn a total of 22,023 from holding Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft or generate 72.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.15% |
| Values | Daily Returns |
Mnchener Rckversicherungs Gese vs. Swiss Life Holding
Performance |
| Timeline |
| Münchener Rückversicherung |
| Swiss Life Holding |
Münchener Rückversicherung and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Münchener Rückversicherung and Swiss Life
The main advantage of trading using opposite Münchener Rückversicherung and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Münchener Rückversicherung position performs unexpectedly, Swiss Life 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 Swiss Life will offset losses from the drop in Swiss Life's long position.| Münchener Rückversicherung vs. Swiss Re AG | Münchener Rückversicherung vs. SiriusPoint | Münchener Rückversicherung vs. Renaissancere Holdings | Münchener Rückversicherung vs. Maiden Holdings |
| Swiss Life vs. ageas SANV | Swiss Life vs. Athene Holding | Swiss Life vs. Athene Holding | Swiss Life vs. The Hartford Financial |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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