Correlation Between Reinsurance Group and Healthcare Services
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and Healthcare Services 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 Healthcare Services 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 Healthcare Services Group, you can compare the effects of market volatilities on Reinsurance Group and Healthcare Services 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 Healthcare Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Healthcare Services.
Diversification Opportunities for Reinsurance Group and Healthcare Services
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Reinsurance and Healthcare is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Healthcare Services Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Services 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 Healthcare Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Services has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and Healthcare Services go up and down completely randomly.
Pair Corralation between Reinsurance Group and Healthcare Services
Assuming the 90 days trading horizon Reinsurance Group of is expected to under-perform the Healthcare Services. In addition to that, Reinsurance Group is 1.47 times more volatile than Healthcare Services Group. It trades about -0.33 of its total potential returns per unit of risk. Healthcare Services Group is currently generating about -0.25 per unit of volatility. If you would invest 1,050 in Healthcare Services Group on December 6, 2024 and sell it today you would lose (100.00) from holding Healthcare Services Group or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Reinsurance Group of vs. Healthcare Services Group
Performance |
| Timeline |
| Reinsurance Group |
| Healthcare Services |
Reinsurance Group and Healthcare Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Healthcare Services
The main advantage of trading using opposite Reinsurance Group and Healthcare Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, Healthcare Services 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 Healthcare Services will offset losses from the drop in Healthcare Services' long position.| Reinsurance Group vs. ARDAGH METAL PACDL 0001 | Reinsurance Group vs. Jacquet Metal Service | Reinsurance Group vs. Endeavour Mining PLC | Reinsurance Group vs. Harmony Gold Mining |
| Healthcare Services vs. SOEDER SPORTFISKE AB | Healthcare Services vs. Citic Telecom International | Healthcare Services vs. Singapore Telecommunications Limited | Healthcare Services vs. Cellnex Telecom SA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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