Correlation Between Oxbridge and Hannover
Can any of the company-specific risk be diversified away by investing in both Oxbridge and Hannover 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 Oxbridge and Hannover into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxbridge Re Holdings and Hannover Re, you can compare the effects of market volatilities on Oxbridge and Hannover 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 Oxbridge with a short position of Hannover. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxbridge and Hannover.
Diversification Opportunities for Oxbridge and Hannover
Good diversification
The 3 months correlation between Oxbridge and Hannover is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oxbridge Re Holdings and Hannover Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannover Re and Oxbridge 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 Oxbridge Re Holdings are associated (or correlated) with Hannover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannover Re has no effect on the direction of Oxbridge i.e., Oxbridge and Hannover go up and down completely randomly.
Pair Corralation between Oxbridge and Hannover
Assuming the 90 days horizon Oxbridge Re Holdings is expected to generate 12.18 times more return on investment than Hannover. However, Oxbridge is 12.18 times more volatile than Hannover Re. It trades about 0.29 of its potential returns per unit of risk. Hannover Re is currently generating about -0.12 per unit of risk. If you would invest 14.00 in Oxbridge Re Holdings on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Oxbridge Re Holdings or generate 57.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Oxbridge Re Holdings vs. Hannover Re
Performance |
| Timeline |
| Oxbridge Re Holdings |
| Hannover Re |
Oxbridge and Hannover Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxbridge and Hannover
The main advantage of trading using opposite Oxbridge and Hannover positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxbridge position performs unexpectedly, Hannover 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 Hannover will offset losses from the drop in Hannover's long position.The idea behind Oxbridge Re Holdings and Hannover Re pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hannover vs. Maiden Holdings | Hannover vs. Renaissancere Holdings | Hannover vs. Greenlight Capital Re | Hannover vs. Reinsurance Group of |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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