Correlation Between Selective Insurance and Münchener Rück
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By analyzing existing cross correlation between Selective Insurance Group and Mnchener Rck AG, you can compare the effects of market volatilities on Selective Insurance and Münchener Rück 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 Selective Insurance with a short position of Münchener Rück. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and Münchener Rück.
Diversification Opportunities for Selective Insurance and Münchener Rück
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Selective and Münchener is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Mnchener Rck AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnchener Rck AG and Selective Insurance 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 Selective Insurance Group are associated (or correlated) with Münchener Rück. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnchener Rck AG has no effect on the direction of Selective Insurance i.e., Selective Insurance and Münchener Rück go up and down completely randomly.
Pair Corralation between Selective Insurance and Münchener Rück
Assuming the 90 days horizon Selective Insurance Group is expected to generate 2.5 times more return on investment than Münchener Rück. However, Selective Insurance is 2.5 times more volatile than Mnchener Rck AG. It trades about 0.25 of its potential returns per unit of risk. Mnchener Rck AG is currently generating about 0.28 per unit of risk. If you would invest 8,316 in Selective Insurance Group on September 2, 2024 and sell it today you would earn a total of 984.00 from holding Selective Insurance Group or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selective Insurance Group vs. Mnchener Rck AG
Performance |
| Timeline |
| Selective Insurance |
| Mnchener Rck AG |
Selective Insurance and Münchener Rück Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and Münchener Rück
The main advantage of trading using opposite Selective Insurance and Münchener Rück positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, Münchener Rück 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 Münchener Rück will offset losses from the drop in Münchener Rück's long position.| Selective Insurance vs. Hemisphere Energy Corp | Selective Insurance vs. TOREX SEMICONDUCTOR LTD | Selective Insurance vs. SAFETY MEDICAL PROD | Selective Insurance vs. CompuGroup Medical SE |
| Münchener Rück vs. GAMESTOP | Münchener Rück vs. United Rentals | Münchener Rück vs. QINGCI GAMES INC | Münchener Rück vs. OURGAME INTHOLDL 00005 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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