Correlation Between Renaissancere Holdings and W R

Can any of the company-specific risk be diversified away by investing in both Renaissancere Holdings and W R 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 Renaissancere Holdings and W R into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Renaissancere Holdings and W R Berkley, you can compare the effects of market volatilities on Renaissancere Holdings and W R 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 Renaissancere Holdings with a short position of W R. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renaissancere Holdings and W R.

Diversification Opportunities for Renaissancere Holdings and W R

0.62

Correlation Coefficient

Renaissancere Holdings  W R

Poor diversification

The 3 months correlation between Renaissancere and WRB is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Renaissancere Holdings and W R Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W R Berkley and Renaissancere Holdings 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 Renaissancere Holdings are associated (or correlated) with W R. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W R Berkley has no effect on the direction of Renaissancere Holdings i.e., Renaissancere Holdings and W R go up and down completely randomly.

Pair Corralation between Renaissancere Holdings and W R

Considering the 90-day investment horizon Renaissancere Holdings is expected to generate 1.27 times more return on investment than W R. However, Renaissancere Holdings is 1.27 times more volatile than W R Berkley. It trades about -0.02 of its potential returns per unit of risk. W R Berkley is currently generating about -0.05 per unit of risk. If you would invest  24,643  in Renaissancere Holdings on May 5, 2025 and sell it today you would lose (460.00) from holding Renaissancere Holdings or give up 1.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Renaissancere Holdings  vs.  W R Berkley

Renaissancere Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Renaissancere Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Renaissancere Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

W R Berkley

Risk-Adjusted Performance

Very Weak

Over the last 90 days W R Berkley has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, W R is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Renaissancere Holdings and W R

The main advantage of trading using opposite Renaissancere Holdings and W R positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renaissancere Holdings position performs unexpectedly, W R 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 W R will offset losses from the drop in W R's long position.

The idea behind Renaissancere Holdings and W R Berkley pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.