Correlation Between SCOR SE and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both SCOR SE and Reinsurance Group 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 SE and Reinsurance Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR SE and Reinsurance Group of, you can compare the effects of market volatilities on SCOR SE and Reinsurance Group 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 SE with a short position of Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR SE and Reinsurance Group.
Diversification Opportunities for SCOR SE and Reinsurance Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCOR and Reinsurance is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group and SCOR SE 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 SE are associated (or correlated) with Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of SCOR SE i.e., SCOR SE and Reinsurance Group go up and down completely randomly.
Pair Corralation between SCOR SE and Reinsurance Group
Assuming the 90 days trading horizon SCOR SE is expected to under-perform the Reinsurance Group. In addition to that, SCOR SE is 1.42 times more volatile than Reinsurance Group of. It trades about -0.01 of its total potential returns per unit of risk. Reinsurance Group of is currently generating about 0.02 per unit of volatility. If you would invest 19,223 in Reinsurance Group of on September 23, 2024 and sell it today you would earn a total of 277.00 from holding Reinsurance Group of or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR SE vs. Reinsurance Group of
Performance |
| Timeline |
| SCOR SE |
| Reinsurance Group |
SCOR SE and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR SE and Reinsurance Group
The main advantage of trading using opposite SCOR SE and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR SE position performs unexpectedly, Reinsurance Group 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 Reinsurance Group will offset losses from the drop in Reinsurance Group's long position.| SCOR SE vs. Titan Machinery | SCOR SE vs. Australian Agricultural | SCOR SE vs. Sumitomo Mitsui Construction | SCOR SE vs. SPORT LISBOA E |
| Reinsurance Group vs. MUENCHRUECKUNSADR 110 | Reinsurance Group vs. Swiss Re AG | Reinsurance Group vs. HANNRUECKVSE ADR 12ON | Reinsurance Group vs. Everest Group |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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