Correlation Between Reinsurance Group and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and LIFENET INSURANCE 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 LIFENET INSURANCE 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 LIFENET INSURANCE CO, you can compare the effects of market volatilities on Reinsurance Group and LIFENET INSURANCE 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and LIFENET INSURANCE.
Diversification Opportunities for Reinsurance Group and LIFENET INSURANCE
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Reinsurance and LIFENET is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Reinsurance Group and LIFENET INSURANCE
Assuming the 90 days trading horizon Reinsurance Group of is expected to generate 1.6 times more return on investment than LIFENET INSURANCE. However, Reinsurance Group is 1.6 times more volatile than LIFENET INSURANCE CO. It trades about 0.2 of its potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about -0.01 per unit of risk. If you would invest 19,415 in Reinsurance Group of on August 29, 2024 and sell it today you would earn a total of 2,585 from holding Reinsurance Group of or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Reinsurance Group of vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| Reinsurance Group |
| LIFENET INSURANCE |
Reinsurance Group and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and LIFENET INSURANCE
The main advantage of trading using opposite Reinsurance Group and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| Reinsurance Group vs. Datadog | Reinsurance Group vs. PARKEN Sport Entertainment | Reinsurance Group vs. TERADATA | Reinsurance Group vs. GREENX METALS LTD |
| LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Xtrackers ShortDAX | LIFENET INSURANCE vs. Lyxor 1 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |