Correlation Between Swiss Re and Reliance Steel
Can any of the company-specific risk be diversified away by investing in both Swiss Re and Reliance Steel 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 Reliance Steel 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 Reliance Steel Aluminum, you can compare the effects of market volatilities on Swiss Re and Reliance Steel 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 Reliance Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Re and Reliance Steel.
Diversification Opportunities for Swiss Re and Reliance Steel
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swiss and Reliance is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Re AG and Reliance Steel Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Steel Aluminum 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 Reliance Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Steel Aluminum has no effect on the direction of Swiss Re i.e., Swiss Re and Reliance Steel go up and down completely randomly.
Pair Corralation between Swiss Re and Reliance Steel
Assuming the 90 days trading horizon Swiss Re is expected to generate 1.82 times less return on investment than Reliance Steel. In addition to that, Swiss Re is 1.64 times more volatile than Reliance Steel Aluminum. It trades about 0.14 of its total potential returns per unit of risk. Reliance Steel Aluminum is currently generating about 0.42 per unit of volatility. If you would invest 25,850 in Reliance Steel Aluminum on November 5, 2024 and sell it today you would earn a total of 2,710 from holding Reliance Steel Aluminum or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Swiss Re AG vs. Reliance Steel Aluminum
Performance |
| Timeline |
| Swiss Re AG |
| Reliance Steel Aluminum |
Swiss Re and Reliance Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Re and Reliance Steel
The main advantage of trading using opposite Swiss Re and Reliance Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Re position performs unexpectedly, Reliance Steel 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 Reliance Steel will offset losses from the drop in Reliance Steel's long position.| Swiss Re vs. DAIDO METAL TD | Swiss Re vs. GREENX METALS LTD | Swiss Re vs. AEON METALS LTD | Swiss Re vs. Singapore Telecommunications Limited |
| Reliance Steel vs. Firan Technology Group | Reliance Steel vs. Align Technology | Reliance Steel vs. OFFICE DEPOT | Reliance Steel vs. Alfa Financial Software |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |