Correlation Between PICC Property and Münchener Rückversicherung
Can any of the company-specific risk be diversified away by investing in both PICC Property and Münchener Rückversicherung 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 PICC Property and Münchener Rückversicherung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICC Property and and Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft, you can compare the effects of market volatilities on PICC Property and Münchener Rückversicherung 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 PICC Property with a short position of Münchener Rückversicherung. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICC Property and Münchener Rückversicherung.
Diversification Opportunities for PICC Property and Münchener Rückversicherung
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PICC and Münchener is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PICC Property and and Mnchener Rckversicherungs Gese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Münchener Rückversicherung and PICC Property 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 PICC Property and are associated (or correlated) with Münchener Rückversicherung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Münchener Rückversicherung has no effect on the direction of PICC Property i.e., PICC Property and Münchener Rückversicherung go up and down completely randomly.
Pair Corralation between PICC Property and Münchener Rückversicherung
Assuming the 90 days horizon PICC Property and is expected to generate 0.9 times more return on investment than Münchener Rückversicherung. However, PICC Property and is 1.11 times less risky than Münchener Rückversicherung. It trades about 0.07 of its potential returns per unit of risk. Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is currently generating about 0.06 per unit of risk. If you would invest 2,084 in PICC Property and on September 2, 2024 and sell it today you would earn a total of 1,778 from holding PICC Property and or generate 85.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.15% |
| Values | Daily Returns |
PICC Property and vs. Mnchener Rckversicherungs Gese
Performance |
| Timeline |
| PICC Property |
| Münchener Rückversicherung |
PICC Property and Münchener Rückversicherung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICC Property and Münchener Rückversicherung
The main advantage of trading using opposite PICC Property and Münchener Rückversicherung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICC Property position performs unexpectedly, Münchener Rückversicherung 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 Münchener Rückversicherung will offset losses from the drop in Münchener Rückversicherung's long position.The idea behind PICC Property and and Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft 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.| Münchener Rückversicherung vs. Swiss Re AG | Münchener Rückversicherung vs. SiriusPoint | Münchener Rückversicherung vs. Renaissancere Holdings | Münchener Rückversicherung 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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