Correlation Between Lendingtree and RenaissanceRe Holdings
Can any of the company-specific risk be diversified away by investing in both Lendingtree and RenaissanceRe Holdings 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 Lendingtree and RenaissanceRe Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendingtree and RenaissanceRe Holdings, you can compare the effects of market volatilities on Lendingtree and RenaissanceRe Holdings 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 Lendingtree with a short position of RenaissanceRe Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendingtree and RenaissanceRe Holdings.
Diversification Opportunities for Lendingtree and RenaissanceRe Holdings
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lendingtree and RenaissanceRe is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lendingtree and RenaissanceRe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RenaissanceRe Holdings and Lendingtree 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 Lendingtree are associated (or correlated) with RenaissanceRe Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RenaissanceRe Holdings has no effect on the direction of Lendingtree i.e., Lendingtree and RenaissanceRe Holdings go up and down completely randomly.
Pair Corralation between Lendingtree and RenaissanceRe Holdings
Given the investment horizon of 90 days Lendingtree is expected to generate 12.98 times less return on investment than RenaissanceRe Holdings. In addition to that, Lendingtree is 7.72 times more volatile than RenaissanceRe Holdings. It trades about 0.0 of its total potential returns per unit of risk. RenaissanceRe Holdings is currently generating about 0.11 per unit of volatility. If you would invest 2,244 in RenaissanceRe Holdings on September 3, 2024 and sell it today you would earn a total of 199.00 from holding RenaissanceRe Holdings or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendingtree vs. RenaissanceRe Holdings
Performance |
| Timeline |
| Lendingtree |
| RenaissanceRe Holdings |
Lendingtree and RenaissanceRe Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendingtree and RenaissanceRe Holdings
The main advantage of trading using opposite Lendingtree and RenaissanceRe Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendingtree position performs unexpectedly, RenaissanceRe Holdings 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 RenaissanceRe Holdings will offset losses from the drop in RenaissanceRe Holdings' long position.| Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial | Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial |
| RenaissanceRe Holdings vs. SiriusPoint | RenaissanceRe Holdings vs. Greenlight Capital Re | RenaissanceRe Holdings vs. Maiden Holdings | RenaissanceRe Holdings vs. Renaissancere Holdings |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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