Correlation Between Muenchener Rueckver and Siriuspoint

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

By analyzing existing cross correlation between Muenchener Rueckver Ges and Siriuspoint, you can compare the effects of market volatilities on Muenchener Rueckver and Siriuspoint 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 Muenchener Rueckver with a short position of Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muenchener Rueckver and Siriuspoint.

Diversification Opportunities for Muenchener Rueckver and Siriuspoint

-0.09

Correlation Coefficient

Muenchener Rueckver  Siriuspoint

Good diversification

The 3 months correlation between Muenchener and Siriuspoint is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Muenchener Rueckver Ges and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Muenchener Rueckver 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 Muenchener Rueckver Ges are associated (or correlated) with Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Muenchener Rueckver i.e., Muenchener Rueckver and Siriuspoint go up and down completely randomly.

Pair Corralation between Muenchener Rueckver and Siriuspoint

Assuming the 90 days horizon Muenchener Rueckver Ges is expected to under-perform the Siriuspoint. But the pink sheet apears to be less risky and, when comparing its historical volatility, Muenchener Rueckver Ges is 1.41 times less risky than Siriuspoint. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Siriuspoint is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,425  in Siriuspoint on September 20, 2024 and sell it today you would earn a total of  25.00  from holding Siriuspoint or generate 1.75% return on investment over 90 days.

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

Muenchener Rueckver Ges  vs.  Siriuspoint

Muenchener Rueckver Ges

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Muenchener Rueckver Ges has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Muenchener Rueckver is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Siriuspoint

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Siriuspoint is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Muenchener Rueckver and Siriuspoint

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

The idea behind Muenchener Rueckver Ges and Siriuspoint 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..