Correlation Between MUENCHRUECKUNSADR and Swiss Re
Can any of the company-specific risk be diversified away by investing in both MUENCHRUECKUNSADR and Swiss Re 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 MUENCHRUECKUNSADR and Swiss Re into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MUENCHRUECKUNSADR 110 and Swiss Re AG, you can compare the effects of market volatilities on MUENCHRUECKUNSADR and Swiss Re 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 MUENCHRUECKUNSADR with a short position of Swiss Re. Check out your portfolio center. Please also check ongoing floating volatility patterns of MUENCHRUECKUNSADR and Swiss Re.
Diversification Opportunities for MUENCHRUECKUNSADR and Swiss Re
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MUENCHRUECKUNSADR and Swiss is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding MUENCHRUECKUNSADR 110 and Swiss Re AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Re AG and MUENCHRUECKUNSADR 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 MUENCHRUECKUNSADR 110 are associated (or correlated) with Swiss Re. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Re AG has no effect on the direction of MUENCHRUECKUNSADR i.e., MUENCHRUECKUNSADR and Swiss Re go up and down completely randomly.
Pair Corralation between MUENCHRUECKUNSADR and Swiss Re
Assuming the 90 days trading horizon MUENCHRUECKUNSADR 110 is expected to generate 1.17 times more return on investment than Swiss Re. However, MUENCHRUECKUNSADR is 1.17 times more volatile than Swiss Re AG. It trades about 0.09 of its potential returns per unit of risk. Swiss Re AG is currently generating about 0.08 per unit of risk. If you would invest 502.00 in MUENCHRUECKUNSADR 110 on November 5, 2024 and sell it today you would earn a total of 528.00 from holding MUENCHRUECKUNSADR 110 or generate 105.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
MUENCHRUECKUNSADR 110 vs. Swiss Re AG
Performance |
| Timeline |
| MUENCHRUECKUNSADR 110 |
| Swiss Re AG |
MUENCHRUECKUNSADR and Swiss Re Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MUENCHRUECKUNSADR and Swiss Re
The main advantage of trading using opposite MUENCHRUECKUNSADR and Swiss Re positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MUENCHRUECKUNSADR position performs unexpectedly, Swiss Re 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 Re will offset losses from the drop in Swiss Re's long position.| MUENCHRUECKUNSADR vs. ALTAIR RES INC | MUENCHRUECKUNSADR vs. ALERION CLEANPOWER | MUENCHRUECKUNSADR vs. Delta Air Lines | MUENCHRUECKUNSADR vs. CHINA SOUTHN AIR H |
| Swiss Re vs. DAIDO METAL TD | Swiss Re vs. GREENX METALS LTD | Swiss Re vs. AEON METALS LTD | Swiss Re vs. Singapore Telecommunications Limited |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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