Correlation Between Reinsurance Group and Oxbridge

Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and Oxbridge 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 Oxbridge 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 Oxbridge Re Holdings, you can compare the effects of market volatilities on Reinsurance Group and Oxbridge 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 Oxbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Oxbridge.

Diversification Opportunities for Reinsurance Group and Oxbridge

0.5

Correlation Coefficient

Reinsurance Group  Oxbridge

Very weak diversification

The 3 months correlation between Reinsurance and Oxbridge is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Oxbridge Re Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxbridge Re Holdings 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 Oxbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxbridge Re Holdings has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and Oxbridge go up and down completely randomly.

Pair Corralation between Reinsurance Group and Oxbridge

Considering the 90-day investment horizon Reinsurance Group of is expected to generate 0.37 times more return on investment than Oxbridge. However, Reinsurance Group of is 2.72 times less risky than Oxbridge. It trades about -0.05 of its potential returns per unit of risk. Oxbridge Re Holdings is currently generating about -0.18 per unit of risk. If you would invest  21,145  in Reinsurance Group of on December 30, 2024 and sell it today you would lose (1,559) from holding Reinsurance Group of or give up 7.37% of portfolio value over 90 days.

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

Reinsurance Group of  vs.  Oxbridge Re Holdings

Reinsurance Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reinsurance Group of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Oxbridge Re Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oxbridge Re Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Reinsurance Group and Oxbridge

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

The idea behind Reinsurance Group of and Oxbridge Re 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.