Correlation Between Reinsurance Group and Xp
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and Xp 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 Xp 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 Xp Inc, you can compare the effects of market volatilities on Reinsurance Group and Xp 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 Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Xp.
Diversification Opportunities for Reinsurance Group and Xp
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Reinsurance and Xp is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and Xp go up and down completely randomly.
Pair Corralation between Reinsurance Group and Xp
Considering the 90-day investment horizon Reinsurance Group of is expected to under-perform the Xp. In addition to that, Reinsurance Group is 1.44 times more volatile than Xp Inc. It trades about -0.35 of its total potential returns per unit of risk. Xp Inc is currently generating about 0.31 per unit of volatility. If you would invest 1,314 in Xp Inc on November 27, 2024 and sell it today you would earn a total of 151.00 from holding Xp Inc or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. Xp Inc
Performance |
| Timeline |
| Reinsurance Group |
| Xp Inc |
Reinsurance Group and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Xp
The main advantage of trading using opposite Reinsurance Group and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.| Reinsurance Group vs. Maiden Holdings | Reinsurance Group vs. Greenlight Capital Re | Reinsurance Group vs. RenaissanceRe Holdings | Reinsurance Group vs. Renaissancere Holdings |
| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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