Correlation Between Hannover Rck and Mnchener Rckversicherungs
Can any of the company-specific risk be diversified away by investing in both Hannover Rck and Mnchener Rckversicherungs 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 Hannover Rck and Mnchener Rckversicherungs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannover Rck SE and Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft, you can compare the effects of market volatilities on Hannover Rck and Mnchener Rckversicherungs 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 Hannover Rck with a short position of Mnchener Rckversicherungs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannover Rck and Mnchener Rckversicherungs.
Diversification Opportunities for Hannover Rck and Mnchener Rckversicherungs
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hannover and Mnchener is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hannover Rck SE and Mnchener Rckversicherungs Gese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnchener Rckversicherungs and Hannover Rck 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 Hannover Rck SE are associated (or correlated) with Mnchener Rckversicherungs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnchener Rckversicherungs has no effect on the direction of Hannover Rck i.e., Hannover Rck and Mnchener Rckversicherungs go up and down completely randomly.
Pair Corralation between Hannover Rck and Mnchener Rckversicherungs
Assuming the 90 days horizon Hannover Rck SE is expected to under-perform the Mnchener Rckversicherungs. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hannover Rck SE is 1.66 times less risky than Mnchener Rckversicherungs. The pink sheet trades about -0.31 of its potential returns per unit of risk. The Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 44,451 in Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft on February 5, 2024 and sell it today you would lose (722.00) from holding Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft or give up 1.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hannover Rck SE vs. Mnchener Rckversicherungs Gese
Performance |
Timeline |
Hannover Rck SE |
Mnchener Rckversicherungs |
Hannover Rck and Mnchener Rckversicherungs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hannover Rck and Mnchener Rckversicherungs
The main advantage of trading using opposite Hannover Rck and Mnchener Rckversicherungs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannover Rck position performs unexpectedly, Mnchener Rckversicherungs 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 Mnchener Rckversicherungs will offset losses from the drop in Mnchener Rckversicherungs' long position.Hannover Rck vs. Swiss Re | Hannover Rck vs. SCOR PK | Hannover Rck vs. SiriusPoint | Hannover Rck vs. Maiden Holdings |
Mnchener Rckversicherungs vs. Swiss Re | Mnchener Rckversicherungs vs. SCOR PK | Mnchener Rckversicherungs vs. SiriusPoint | Mnchener Rckversicherungs vs. Maiden 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |