Correlation Between Tradegate and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both Tradegate 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 Tradegate and Reinsurance Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Reinsurance Group of, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Reinsurance Group.
Diversification Opportunities for Tradegate and Reinsurance Group
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tradegate and Reinsurance is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and Reinsurance Group go up and down completely randomly.
Pair Corralation between Tradegate and Reinsurance Group
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to generate 0.35 times more return on investment than Reinsurance Group. However, Tradegate AG Wertpapierhandelsbank is 2.89 times less risky than Reinsurance Group. It trades about 0.0 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 8,850 in Tradegate AG Wertpapierhandelsbank on September 22, 2024 and sell it today you would earn a total of 0.00 from holding Tradegate AG Wertpapierhandelsbank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. Reinsurance Group of
Performance |
| Timeline |
| Tradegate AG Wertpap |
| Reinsurance Group |
Tradegate and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and Reinsurance Group
The main advantage of trading using opposite Tradegate and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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.| Tradegate vs. Morgan Stanley | Tradegate vs. Morgan Stanley | Tradegate vs. The Charles Schwab | Tradegate vs. The Goldman Sachs |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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