Correlation Between RenaissanceRe Holdings and Colas SA
Can any of the company-specific risk be diversified away by investing in both RenaissanceRe Holdings and Colas SA 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 RenaissanceRe Holdings and Colas SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RenaissanceRe Holdings and Colas SA, you can compare the effects of market volatilities on RenaissanceRe Holdings and Colas SA 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 RenaissanceRe Holdings with a short position of Colas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RenaissanceRe Holdings and Colas SA.
Diversification Opportunities for RenaissanceRe Holdings and Colas SA
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RenaissanceRe and Colas is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding RenaissanceRe Holdings and Colas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colas SA and RenaissanceRe Holdings 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 RenaissanceRe Holdings are associated (or correlated) with Colas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colas SA has no effect on the direction of RenaissanceRe Holdings i.e., RenaissanceRe Holdings and Colas SA go up and down completely randomly.
Pair Corralation between RenaissanceRe Holdings and Colas SA
If you would invest 35,128 in Colas SA on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Colas SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
RenaissanceRe Holdings vs. Colas SA
Performance |
| Timeline |
| RenaissanceRe Holdings |
| Colas SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
RenaissanceRe Holdings and Colas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RenaissanceRe Holdings and Colas SA
The main advantage of trading using opposite RenaissanceRe Holdings and Colas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RenaissanceRe Holdings position performs unexpectedly, Colas SA 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 Colas SA will offset losses from the drop in Colas SA's long position.| RenaissanceRe Holdings vs. RenaissanceRe Holdings | RenaissanceRe Holdings vs. Athene Holding | RenaissanceRe Holdings vs. AXIS Capital Holdings | RenaissanceRe Holdings vs. Truist Financial |
| Colas SA vs. Reinsurance Group of | Colas SA vs. Siriuspoint | Colas SA vs. RenaissanceRe Holdings | Colas SA vs. Maiden 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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