Correlation Between SUN ART and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both SUN ART 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 SUN ART and Reinsurance Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUN ART RETAIL and Reinsurance Group of, you can compare the effects of market volatilities on SUN ART 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 SUN ART with a short position of Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and Reinsurance Group.
Diversification Opportunities for SUN ART and Reinsurance Group
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SUN and Reinsurance is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group and SUN ART 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 SUN ART RETAIL 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 SUN ART i.e., SUN ART and Reinsurance Group go up and down completely randomly.
Pair Corralation between SUN ART and Reinsurance Group
Assuming the 90 days trading horizon SUN ART RETAIL is expected to generate 2.68 times more return on investment than Reinsurance Group. However, SUN ART is 2.68 times more volatile than Reinsurance Group of. It trades about 0.24 of its potential returns per unit of risk. Reinsurance Group of is currently generating about -0.39 per unit of risk. If you would invest 26.00 in SUN ART RETAIL on September 22, 2024 and sell it today you would earn a total of 5.00 from holding SUN ART RETAIL or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUN ART RETAIL vs. Reinsurance Group of
Performance |
| Timeline |
| SUN ART RETAIL |
| Reinsurance Group |
SUN ART and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN ART and Reinsurance Group
The main advantage of trading using opposite SUN ART and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN ART 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.The idea behind SUN ART RETAIL and Reinsurance Group of 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.| Reinsurance Group vs. AUST AGRICULTURAL | Reinsurance Group vs. Hanison Construction Holdings | Reinsurance Group vs. North American Construction | Reinsurance Group vs. GREENX METALS LTD |
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.
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