Correlation Between Hua Hong and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both Hua Hong and Singapore Reinsurance 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 Hua Hong and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and Singapore Reinsurance, you can compare the effects of market volatilities on Hua Hong and Singapore Reinsurance 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 Hua Hong with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Singapore Reinsurance.
Diversification Opportunities for Hua Hong and Singapore Reinsurance
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hua and Singapore is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with Singapore Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Reinsurance has no effect on the direction of Hua Hong i.e., Hua Hong and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between Hua Hong and Singapore Reinsurance
Assuming the 90 days horizon Hua Hong is expected to generate 2.53 times less return on investment than Singapore Reinsurance. In addition to that, Hua Hong is 1.27 times more volatile than Singapore Reinsurance. It trades about 0.0 of its total potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.01 per unit of volatility. If you would invest 3,640 in Singapore Reinsurance on October 13, 2024 and sell it today you would lose (60.00) from holding Singapore Reinsurance or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Singapore Reinsurance
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Singapore Reinsurance |
Hua Hong and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Singapore Reinsurance
The main advantage of trading using opposite Hua Hong and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, Singapore Reinsurance 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 Singapore Reinsurance will offset losses from the drop in Singapore Reinsurance's long position.| Hua Hong vs. SINGAPORE AIRLINES | Hua Hong vs. SOUTHWEST AIRLINES | Hua Hong vs. Sims Metal Management | Hua Hong vs. Southwest Airlines Co |
| Singapore Reinsurance vs. ELMOS SEMICONDUCTOR | Singapore Reinsurance vs. NXP Semiconductors NV | Singapore Reinsurance vs. CHEMICAL INDUSTRIES | Singapore Reinsurance vs. Hua Hong Semiconductor |
Check out your portfolio center.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.
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