Correlation Between Reinsurance Group and Radisson Mining

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

By analyzing existing cross correlation between Reinsurance Group of and Radisson Mining Resources, you can compare the effects of market volatilities on Reinsurance Group and Radisson Mining 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 Reinsurance Group with a short position of Radisson Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Radisson Mining.

Diversification Opportunities for Reinsurance Group and Radisson Mining

-0.46

Correlation Coefficient

Reinsurance Group  Radisson Mining

Very good diversification

The 3 months correlation between Reinsurance and Radisson is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Radisson Mining Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radisson Mining Resources and Reinsurance Group 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 Reinsurance Group of are associated (or correlated) with Radisson Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radisson Mining Resources has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and Radisson Mining go up and down completely randomly.

Pair Corralation between Reinsurance Group and Radisson Mining

Considering the 90-day investment horizon Reinsurance Group of is expected to generate 0.28 times more return on investment than Radisson Mining. However, Reinsurance Group of is 3.52 times less risky than Radisson Mining. It trades about 0.13 of its potential returns per unit of risk. Radisson Mining Resources is currently generating about 0.03 per unit of risk. If you would invest  18,341  in Reinsurance Group of on March 19, 2024 and sell it today you would earn a total of  1,860  from holding Reinsurance Group of or generate 10.14% return on investment over 90 days.

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

Reinsurance Group of  vs.  Radisson Mining Resources

Reinsurance Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Reinsurance Group of are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Reinsurance Group may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Radisson Mining Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Radisson Mining Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, Radisson Mining may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Reinsurance Group and Radisson Mining

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

The idea behind Reinsurance Group of and Radisson Mining Resources 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 Commodity Directory module to find actively traded commodities issued by global exchanges.