Correlation Between National Reinsurance and Suntrust Home

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

By analyzing existing cross correlation between National Reinsurance and Suntrust Home Developers, you can compare the effects of market volatilities on National Reinsurance and Suntrust Home 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 National Reinsurance with a short position of Suntrust Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Suntrust Home.

Diversification Opportunities for National Reinsurance and Suntrust Home

0.02

Correlation Coefficient

National Reinsurance  Suntrust Home

Significant diversification

The 3 months correlation between National and Suntrust is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Suntrust Home Developers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntrust Home Developers and National Reinsurance 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 National Reinsurance are associated (or correlated) with Suntrust Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntrust Home Developers has no effect on the direction of National Reinsurance i.e., National Reinsurance and Suntrust Home go up and down completely randomly.

Pair Corralation between National Reinsurance and Suntrust Home

Assuming the 90 days trading horizon National Reinsurance is expected to generate 0.85 times more return on investment than Suntrust Home. However, National Reinsurance is 1.18 times less risky than Suntrust Home. It trades about 0.1 of its potential returns per unit of risk. Suntrust Home Developers is currently generating about 0.02 per unit of risk. If you would invest  54.00  in National Reinsurance on April 20, 2025 and sell it today you would earn a total of  8.00  from holding National Reinsurance or generate 14.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.22%
Values	Daily Returns

National Reinsurance  vs.  Suntrust Home Developers

National Reinsurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Reinsurance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, National Reinsurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Suntrust Home Developers

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Suntrust Home Developers are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Suntrust Home is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with National Reinsurance and Suntrust Home

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

The idea behind National Reinsurance and Suntrust Home Developers 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.