Correlation Between Reinsurance Group and SLR Investment
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on Reinsurance Group and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and SLR Investment.
Diversification Opportunities for Reinsurance Group and SLR Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Reinsurance and SLR is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and SLR Investment go up and down completely randomly.
Pair Corralation between Reinsurance Group and SLR Investment
Assuming the 90 days trading horizon Reinsurance Group of is expected to generate 1.72 times more return on investment than SLR Investment. However, Reinsurance Group is 1.72 times more volatile than SLR Investment Corp. It trades about 0.06 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.06 per unit of risk. If you would invest 18,728 in Reinsurance Group of on September 2, 2024 and sell it today you would earn a total of 2,872 from holding Reinsurance Group of or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. SLR Investment Corp
Performance |
| Timeline |
| Reinsurance Group |
| SLR Investment Corp |
Reinsurance Group and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and SLR Investment
The main advantage of trading using opposite Reinsurance Group and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| Reinsurance Group vs. Superior Plus Corp | Reinsurance Group vs. Origin Agritech | Reinsurance Group vs. Identiv | Reinsurance Group vs. INTUITIVE SURGICAL |
| SLR Investment vs. Ameriprise Financial | SLR Investment vs. Ares Management Corp | SLR Investment vs. Superior Plus Corp | SLR Investment vs. NMI 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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