Correlation Between Reinsurance Group and Western Copper
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on Reinsurance Group and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Western Copper.
Diversification Opportunities for Reinsurance Group and Western Copper
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Reinsurance and Western is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and Western Copper go up and down completely randomly.
Pair Corralation between Reinsurance Group and Western Copper
Assuming the 90 days trading horizon Reinsurance Group of is expected to generate 0.52 times more return on investment than Western Copper. However, Reinsurance Group of is 1.92 times less risky than Western Copper. It trades about 0.09 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest 13,176 in Reinsurance Group of on August 31, 2024 and sell it today you would earn a total of 8,424 from holding Reinsurance Group of or generate 63.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Reinsurance Group of vs. Western Copper and
Performance |
| Timeline |
| Reinsurance Group |
| Western Copper |
Reinsurance Group and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Western Copper
The main advantage of trading using opposite Reinsurance Group and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Reinsurance Group vs. Corporate Travel Management | Reinsurance Group vs. XLMedia PLC | Reinsurance Group vs. Jupiter Fund Management | Reinsurance Group vs. Playtech plc |
| Western Copper vs. MTI WIRELESS EDGE | Western Copper vs. Playa Hotels Resorts | Western Copper vs. Playtech plc | Western Copper vs. INTERSHOP Communications Aktiengesellschaft |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |