Correlation Between Reinsurance Group and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and Maiden 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 Reinsurance Group and Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and Maiden Holdings, you can compare the effects of market volatilities on Reinsurance Group and Maiden 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 Reinsurance Group with a short position of Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Maiden Holdings.
Diversification Opportunities for Reinsurance Group and Maiden Holdings
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Reinsurance and Maiden is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings and Reinsurance Group 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 Reinsurance Group of are associated (or correlated) with Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and Maiden Holdings go up and down completely randomly.
Pair Corralation between Reinsurance Group and Maiden Holdings
Considering the 90-day investment horizon Reinsurance Group of is expected to generate 0.33 times more return on investment than Maiden Holdings. However, Reinsurance Group of is 3.05 times less risky than Maiden Holdings. It trades about 0.11 of its potential returns per unit of risk. Maiden Holdings is currently generating about 0.02 per unit of risk. If you would invest 16,023 in Reinsurance Group of on August 26, 2024 and sell it today you would earn a total of 7,047 from holding Reinsurance Group of or generate 43.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. Maiden Holdings
Performance |
| Timeline |
| Reinsurance Group |
| Maiden Holdings |
Reinsurance Group and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Maiden Holdings
The main advantage of trading using opposite Reinsurance Group and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, Maiden 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Reinsurance Group vs. Maiden Holdings | Reinsurance Group vs. Greenlight Capital Re | Reinsurance Group vs. RenaissanceRe Holdings | Reinsurance Group vs. Renaissancere Holdings |
| Maiden Holdings vs. Siriuspoint | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Oxbridge Re Holdings | Maiden Holdings vs. Greenlight Capital Re |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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