Correlation Between Varta AG and Münchener Rück
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By analyzing existing cross correlation between Varta AG and Mnchener Rck AG, you can compare the effects of market volatilities on Varta AG 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 Varta AG with a short position of Münchener Rück. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varta AG and Münchener Rück.
Diversification Opportunities for Varta AG and Münchener Rück
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Varta and Münchener is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Varta AG 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 Varta AG 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 Varta AG 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 Varta AG i.e., Varta AG and Münchener Rück go up and down completely randomly.
Pair Corralation between Varta AG and Münchener Rück
Assuming the 90 days trading horizon Varta AG is expected to under-perform the Münchener Rück. In addition to that, Varta AG is 7.68 times more volatile than Mnchener Rck AG. It trades about -0.01 of its total potential returns per unit of risk. Mnchener Rck AG is currently generating about 0.09 per unit of volatility. If you would invest 30,207 in Mnchener Rck AG on August 31, 2024 and sell it today you would earn a total of 18,883 from holding Mnchener Rck AG or generate 62.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Varta AG vs. Mnchener Rck AG
Performance |
| Timeline |
| Varta AG |
| Mnchener Rck AG |
Varta AG and Münchener Rück Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varta AG and Münchener Rück
The main advantage of trading using opposite Varta AG and Münchener Rück positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varta AG 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.| Varta AG vs. YATRA ONLINE DL 0001 | Varta AG vs. SINGAPORE AIRLINES | Varta AG vs. Aegean Airlines SA | Varta AG vs. BOS BETTER ONLINE |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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