Correlation Between SCOR PK and Hannover
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Hannover 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 SCOR PK and Hannover into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Hannover Re, you can compare the effects of market volatilities on SCOR PK and Hannover 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 SCOR PK with a short position of Hannover. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Hannover.
Diversification Opportunities for SCOR PK and Hannover
Very good diversification
The 3 months correlation between SCOR and Hannover is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Hannover Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannover Re and SCOR PK 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 SCOR PK are associated (or correlated) with Hannover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannover Re has no effect on the direction of SCOR PK i.e., SCOR PK and Hannover go up and down completely randomly.
Pair Corralation between SCOR PK and Hannover
Assuming the 90 days horizon SCOR PK is expected to generate 2.8 times more return on investment than Hannover. However, SCOR PK is 2.8 times more volatile than Hannover Re. It trades about 0.2 of its potential returns per unit of risk. Hannover Re is currently generating about -0.17 per unit of risk. If you would invest 221.00 in SCOR PK on August 28, 2024 and sell it today you would earn a total of 29.00 from holding SCOR PK or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Hannover Re
Performance |
| Timeline |
| SCOR PK |
| Hannover Re |
SCOR PK and Hannover Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Hannover
The main advantage of trading using opposite SCOR PK and Hannover positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Hannover 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 Hannover will offset losses from the drop in Hannover's long position.The idea behind SCOR PK and Hannover Re pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hannover vs. Maiden Holdings | Hannover vs. Renaissancere Holdings | Hannover vs. Greenlight Capital Re | Hannover vs. Reinsurance Group of |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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