Correlation Between Maiden Holdings and Greenlight Capital

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

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

Diversification Opportunities for Maiden Holdings and Greenlight Capital

0.25

Correlation Coefficient

Maiden Holdings  Greenlight Capital

Modest diversification

The 3 months correlation between Maiden and Greenlight is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Greenlight Capital Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlight Capital 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 Greenlight Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlight Capital has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Greenlight Capital go up and down completely randomly.

Pair Corralation between Maiden Holdings and Greenlight Capital

Given the investment horizon of 90 days Maiden Holdings is expected to generate 17.91 times less return on investment than Greenlight Capital. In addition to that, Maiden Holdings is 2.31 times more volatile than Greenlight Capital Re. It trades about 0.0 of its total potential returns per unit of risk. Greenlight Capital Re is currently generating about 0.09 per unit of volatility. If you would invest  1,362  in Greenlight Capital Re on September 2, 2024 and sell it today you would earn a total of  131.00  from holding Greenlight Capital Re or generate 9.62% return on investment over 90 days.

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

Maiden Holdings  vs.  Greenlight Capital Re

Maiden Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Greenlight Capital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greenlight Capital Re are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Greenlight Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Maiden Holdings and Greenlight Capital

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

The idea behind Maiden Holdings and Greenlight Capital 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.