Correlation Between Maiden Holdings and Oxbridge

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

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

Diversification Opportunities for Maiden Holdings and Oxbridge

0.59

Correlation Coefficient

Maiden Holdings  Oxbridge

Very weak diversification

The 3 months correlation between Maiden and Oxbridge is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Oxbridge Re Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxbridge Re Holdings and Maiden 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 Maiden Holdings are associated (or correlated) with Oxbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxbridge Re Holdings has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Oxbridge go up and down completely randomly.

Pair Corralation between Maiden Holdings and Oxbridge

Given the investment horizon of 90 days Maiden Holdings is expected to generate 2.96 times less return on investment than Oxbridge. In addition to that, Maiden Holdings is 1.29 times more volatile than Oxbridge Re Holdings. It trades about 0.02 of its total potential returns per unit of risk. Oxbridge Re Holdings is currently generating about 0.07 per unit of volatility. If you would invest  113.00  in Oxbridge Re Holdings on February 3, 2024 and sell it today you would earn a total of  4.00  from holding Oxbridge Re Holdings or generate 3.54% return on investment over 90 days.

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

Maiden Holdings  vs.  Oxbridge Re Holdings

Maiden Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maiden Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Maiden Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Oxbridge Re Holdings

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oxbridge Re Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Oxbridge reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maiden Holdings and Oxbridge

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

The idea behind Maiden Holdings and Oxbridge Re Holdings 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.