Correlation Between Renaissancere Holdings and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both Renaissancere Holdings and AXIS Capital 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 AXIS Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renaissancere Holdings and AXIS Capital Holdings, you can compare the effects of market volatilities on Renaissancere Holdings and AXIS Capital 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 AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renaissancere Holdings and AXIS Capital.
Diversification Opportunities for Renaissancere Holdings and AXIS Capital
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Renaissancere and AXIS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Renaissancere Holdings and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings 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 AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of Renaissancere Holdings i.e., Renaissancere Holdings and AXIS Capital go up and down completely randomly.
Pair Corralation between Renaissancere Holdings and AXIS Capital
Considering the 90-day investment horizon Renaissancere Holdings is expected to under-perform the AXIS Capital. In addition to that, Renaissancere Holdings is 1.02 times more volatile than AXIS Capital Holdings. It trades about -0.17 of its total potential returns per unit of risk. AXIS Capital Holdings is currently generating about -0.08 per unit of volatility. If you would invest 6,375 in AXIS Capital Holdings on January 25, 2024 and sell it today you would lose (150.00) from holding AXIS Capital Holdings or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renaissancere Holdings vs. AXIS Capital Holdings
Performance |
| Timeline |
| Renaissancere Holdings |
| AXIS Capital Holdings |
Renaissancere Holdings and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renaissancere Holdings and AXIS Capital
The main advantage of trading using opposite Renaissancere Holdings and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renaissancere Holdings position performs unexpectedly, AXIS Capital 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| Renaissancere Holdings vs. RenaissanceRe Holdings | Renaissancere Holdings vs. PartnerRe | Renaissancere Holdings vs. SCOR PK | Renaissancere Holdings vs. SiriusPoint |
| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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