Correlation Between BNRE Old and Hannover

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

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

Diversification Opportunities for BNRE Old and Hannover

0.0

Correlation Coefficient

BNRE Old  Hannover

Pay attention - limited upside

The 3 months correlation between BNRE and Hannover is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BNRE Old and Hannover Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannover Re and BNRE Old 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 BNRE Old are associated (or correlated) with Hannover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannover Re has no effect on the direction of BNRE Old i.e., BNRE Old and Hannover go up and down completely randomly.

Pair Corralation between BNRE Old and Hannover

If you would invest  4,166  in Hannover Re on December 31, 2024 and sell it today you would earn a total of  830.00  from holding Hannover Re or generate 19.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BNRE Old  vs.  Hannover Re

BNRE Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days BNRE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BNRE Old is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Hannover Re

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hannover Re are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hannover showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BNRE Old and Hannover

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

The idea behind BNRE Old and Hannover Re 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .