Correlation Between Reinsurance Group and SCI Engineered
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and SCI Engineered 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 SCI Engineered 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 SCI Engineered Materials, you can compare the effects of market volatilities on Reinsurance Group and SCI Engineered 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 SCI Engineered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and SCI Engineered.
Diversification Opportunities for Reinsurance Group and SCI Engineered
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Reinsurance and SCI is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and SCI Engineered Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Engineered Materials 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 SCI Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Engineered Materials has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and SCI Engineered go up and down completely randomly.
Pair Corralation between Reinsurance Group and SCI Engineered
Considering the 90-day investment horizon Reinsurance Group of is expected to generate 0.42 times more return on investment than SCI Engineered. However, Reinsurance Group of is 2.36 times less risky than SCI Engineered. It trades about 0.1 of its potential returns per unit of risk. SCI Engineered Materials is currently generating about 0.03 per unit of risk. If you would invest 13,954 in Reinsurance Group of on September 2, 2024 and sell it today you would earn a total of 8,886 from holding Reinsurance Group of or generate 63.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.4% |
| Values | Daily Returns |
Reinsurance Group of vs. SCI Engineered Materials
Performance |
| Timeline |
| Reinsurance Group |
| SCI Engineered Materials |
Reinsurance Group and SCI Engineered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and SCI Engineered
The main advantage of trading using opposite Reinsurance Group and SCI Engineered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, SCI Engineered 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 SCI Engineered will offset losses from the drop in SCI Engineered's long position.| Reinsurance Group vs. Maiden Holdings | Reinsurance Group vs. Greenlight Capital Re | Reinsurance Group vs. RenaissanceRe Holdings | Reinsurance Group vs. Renaissancere Holdings |
| SCI Engineered vs. Ultra Clean Holdings | SCI Engineered vs. Amtech Systems | SCI Engineered vs. Veeco Instruments | SCI Engineered vs. Cohu Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |