Correlation Between Swiss Re and MUENCHRUECKUNSADR
Can any of the company-specific risk be diversified away by investing in both Swiss Re and MUENCHRUECKUNSADR 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 Swiss Re and MUENCHRUECKUNSADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Re AG and MUENCHRUECKUNSADR 110, you can compare the effects of market volatilities on Swiss Re and MUENCHRUECKUNSADR 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 Swiss Re with a short position of MUENCHRUECKUNSADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Re and MUENCHRUECKUNSADR.
Diversification Opportunities for Swiss Re and MUENCHRUECKUNSADR
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swiss and MUENCHRUECKUNSADR is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Re AG and MUENCHRUECKUNSADR 110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUENCHRUECKUNSADR 110 and Swiss Re 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 Swiss Re AG are associated (or correlated) with MUENCHRUECKUNSADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUENCHRUECKUNSADR 110 has no effect on the direction of Swiss Re i.e., Swiss Re and MUENCHRUECKUNSADR go up and down completely randomly.
Pair Corralation between Swiss Re and MUENCHRUECKUNSADR
Assuming the 90 days trading horizon Swiss Re AG is expected to generate 0.87 times more return on investment than MUENCHRUECKUNSADR. However, Swiss Re AG is 1.15 times less risky than MUENCHRUECKUNSADR. It trades about 0.15 of its potential returns per unit of risk. MUENCHRUECKUNSADR 110 is currently generating about 0.02 per unit of risk. If you would invest 2,980 in Swiss Re AG on September 23, 2024 and sell it today you would earn a total of 440.00 from holding Swiss Re AG or generate 14.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Re AG vs. MUENCHRUECKUNSADR 110
Performance |
| Timeline |
| Swiss Re AG |
| MUENCHRUECKUNSADR 110 |
Swiss Re and MUENCHRUECKUNSADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Re and MUENCHRUECKUNSADR
The main advantage of trading using opposite Swiss Re and MUENCHRUECKUNSADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Re position performs unexpectedly, MUENCHRUECKUNSADR 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 MUENCHRUECKUNSADR will offset losses from the drop in MUENCHRUECKUNSADR's long position.| Swiss Re vs. MUENCHRUECKUNSADR 110 | Swiss Re vs. HANNRUECKVSE ADR 12ON | Swiss Re vs. Everest Group | Swiss Re vs. Reinsurance Group of |
| MUENCHRUECKUNSADR vs. Swiss Re AG | MUENCHRUECKUNSADR vs. HANNRUECKVSE ADR 12ON | MUENCHRUECKUNSADR vs. Everest Group | MUENCHRUECKUNSADR 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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