Correlation Between SCOR PK and Muenchener Rueckver
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Muenchener Rueckver 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 Muenchener Rueckver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Muenchener Rueckver Ges, you can compare the effects of market volatilities on SCOR PK and Muenchener Rueckver 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 Muenchener Rueckver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Muenchener Rueckver.
Diversification Opportunities for SCOR PK and Muenchener Rueckver
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCOR and Muenchener is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Muenchener Rueckver Ges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muenchener Rueckver Ges 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 Muenchener Rueckver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muenchener Rueckver Ges has no effect on the direction of SCOR PK i.e., SCOR PK and Muenchener Rueckver go up and down completely randomly.
Pair Corralation between SCOR PK and Muenchener Rueckver
Assuming the 90 days horizon SCOR PK is expected to under-perform the Muenchener Rueckver. In addition to that, SCOR PK is 1.46 times more volatile than Muenchener Rueckver Ges. It trades about -0.03 of its total potential returns per unit of risk. Muenchener Rueckver Ges is currently generating about 0.09 per unit of volatility. If you would invest 1,009 in Muenchener Rueckver Ges on September 22, 2024 and sell it today you would earn a total of 33.00 from holding Muenchener Rueckver Ges or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Muenchener Rueckver Ges
Performance |
| Timeline |
| SCOR PK |
| Muenchener Rueckver Ges |
SCOR PK and Muenchener Rueckver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Muenchener Rueckver
The main advantage of trading using opposite SCOR PK and Muenchener Rueckver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Muenchener Rueckver 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 Muenchener Rueckver will offset losses from the drop in Muenchener Rueckver's long position.The idea behind SCOR PK and Muenchener Rueckver Ges 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.| Muenchener Rueckver vs. Maiden Holdings | Muenchener Rueckver vs. Renaissancere Holdings | Muenchener Rueckver vs. Greenlight Capital Re | Muenchener Rueckver 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| CEOs Directory Screen CEOs from public companies around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |