Correlation Between Oxbridge and Renaissancere Holdings

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

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

Diversification Opportunities for Oxbridge and Renaissancere Holdings

0.56

Correlation Coefficient

Oxbridge  Renaissancere Holdings

Very weak diversification

The 3 months correlation between Oxbridge and Renaissancere is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Oxbridge Re Holdings and Renaissancere Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renaissancere Holdings and Oxbridge 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 Oxbridge Re Holdings are associated (or correlated) with Renaissancere Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renaissancere Holdings has no effect on the direction of Oxbridge i.e., Oxbridge and Renaissancere Holdings go up and down completely randomly.

Pair Corralation between Oxbridge and Renaissancere Holdings

Given the investment horizon of 90 days Oxbridge Re Holdings is expected to generate 3.04 times more return on investment than Renaissancere Holdings. However, Oxbridge is 3.04 times more volatile than Renaissancere Holdings. It trades about 0.12 of its potential returns per unit of risk. Renaissancere Holdings is currently generating about 0.1 per unit of risk. If you would invest  105.00  in Oxbridge Re Holdings on September 2, 2024 and sell it today you would earn a total of  203.00  from holding Oxbridge Re Holdings or generate 193.33% return on investment over 90 days.

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

Oxbridge Re Holdings  vs.  Renaissancere Holdings

Oxbridge Re Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oxbridge Re Holdings are ranked lower than 10 (%) 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.

Renaissancere Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Renaissancere Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Renaissancere Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Oxbridge and Renaissancere Holdings

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

The idea behind Oxbridge Re Holdings and Renaissancere 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..