Correlation Between Muenchener Rueckver and SCOR SE
Can any of the company-specific risk be diversified away by investing in both Muenchener Rueckver and SCOR SE 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 Muenchener Rueckver and SCOR SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muenchener Rueckver Ges and SCOR SE, you can compare the effects of market volatilities on Muenchener Rueckver and SCOR SE 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 Muenchener Rueckver with a short position of SCOR SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muenchener Rueckver and SCOR SE.
Diversification Opportunities for Muenchener Rueckver and SCOR SE
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Muenchener and SCOR is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Muenchener Rueckver Ges and SCOR SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR SE and Muenchener Rueckver 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 Muenchener Rueckver Ges are associated (or correlated) with SCOR SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR SE has no effect on the direction of Muenchener Rueckver i.e., Muenchener Rueckver and SCOR SE go up and down completely randomly.
Pair Corralation between Muenchener Rueckver and SCOR SE
Assuming the 90 days horizon Muenchener Rueckver Ges is expected to generate 0.48 times more return on investment than SCOR SE. However, Muenchener Rueckver Ges is 2.07 times less risky than SCOR SE. It trades about 0.1 of its potential returns per unit of risk. SCOR SE is currently generating about -0.02 per unit of risk. If you would invest 684.00 in Muenchener Rueckver Ges on August 31, 2024 and sell it today you would earn a total of 357.00 from holding Muenchener Rueckver Ges or generate 52.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 45.99% |
| Values | Daily Returns |
Muenchener Rueckver Ges vs. SCOR SE
Performance |
| Timeline |
| Muenchener Rueckver Ges |
| SCOR SE |
Muenchener Rueckver and SCOR SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muenchener Rueckver and SCOR SE
The main advantage of trading using opposite Muenchener Rueckver and SCOR SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muenchener Rueckver position performs unexpectedly, SCOR SE 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 SCOR SE will offset losses from the drop in SCOR SE's long position.| Muenchener Rueckver vs. Swiss Re AG | Muenchener Rueckver vs. SiriusPoint | Muenchener Rueckver vs. Renaissancere Holdings | Muenchener Rueckver vs. Maiden 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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