Correlation Between Colas SA and Renaissancere Holdings
Can any of the company-specific risk be diversified away by investing in both Colas SA and Renaissancere Holdings 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 Colas SA and Renaissancere Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colas SA and Renaissancere Holdings, you can compare the effects of market volatilities on Colas SA and Renaissancere Holdings 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 Colas SA with a short position of Renaissancere Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colas SA and Renaissancere Holdings.
Diversification Opportunities for Colas SA and Renaissancere Holdings
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Colas and Renaissancere is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Colas SA and Renaissancere Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renaissancere Holdings and Colas SA 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 Colas SA are associated (or correlated) with Renaissancere Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renaissancere Holdings has no effect on the direction of Colas SA i.e., Colas SA and Renaissancere Holdings go up and down completely randomly.
Pair Corralation between Colas SA and Renaissancere Holdings
Allowing for the 90-day total investment horizon Colas SA is expected to generate 1.52 times less return on investment than Renaissancere Holdings. But when comparing it to its historical volatility, Colas SA is 1.01 times less risky than Renaissancere Holdings. It trades about 0.04 of its potential returns per unit of risk. Renaissancere Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 18,365 in Renaissancere Holdings on August 24, 2024 and sell it today you would earn a total of 8,825 from holding Renaissancere Holdings or generate 48.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 29.84% |
| Values | Daily Returns |
Colas SA vs. Renaissancere Holdings
Performance |
| Timeline |
| Colas SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Renaissancere Holdings |
Colas SA and Renaissancere Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colas SA and Renaissancere Holdings
The main advantage of trading using opposite Colas SA and Renaissancere Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colas SA position performs unexpectedly, Renaissancere Holdings 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 Renaissancere Holdings will offset losses from the drop in Renaissancere Holdings' long position.| Colas SA vs. Reinsurance Group of | Colas SA vs. Siriuspoint | Colas SA vs. RenaissanceRe Holdings | Colas SA vs. Maiden Holdings |
| Renaissancere Holdings vs. Reinsurance Group of | Renaissancere Holdings vs. Greenlight Capital Re | Renaissancere Holdings vs. Siriuspoint | Renaissancere Holdings vs. SCOR PK |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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