Correlation Between BNRE Old and Swiss Re

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

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

Diversification Opportunities for BNRE Old and Swiss Re

0.0

Correlation Coefficient

BNRE Old  Swiss Re

Pay attention - limited upside

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

Pair Corralation between BNRE Old and Swiss Re

If you would invest  3,618  in Swiss Re on December 30, 2024 and sell it today you would earn a total of  680.00  from holding Swiss Re or generate 18.79% return on investment over 90 days.

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

BNRE Old  vs.  Swiss 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.

Swiss Re

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Re are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Swiss Re showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BNRE Old and Swiss Re

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

The idea behind BNRE Old and Swiss 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.