Correlation Between MACOM Technology and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both MACOM Technology 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 MACOM Technology and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MACOM Technology Solutions and Singapore Reinsurance, you can compare the effects of market volatilities on MACOM Technology 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 MACOM Technology with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Singapore Reinsurance.
Diversification Opportunities for MACOM Technology and Singapore Reinsurance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MACOM and Singapore is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and MACOM Technology 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 MACOM Technology Solutions 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 MACOM Technology i.e., MACOM Technology and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between MACOM Technology and Singapore Reinsurance
Assuming the 90 days horizon MACOM Technology Solutions is expected to under-perform the Singapore Reinsurance. In addition to that, MACOM Technology is 1.98 times more volatile than Singapore Reinsurance. It trades about -0.04 of its total potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.16 per unit of volatility. If you would invest 3,540 in Singapore Reinsurance on November 1, 2024 and sell it today you would earn a total of 200.00 from holding Singapore Reinsurance or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Singapore Reinsurance
Performance |
| Timeline |
| MACOM Technology Sol |
| Singapore Reinsurance |
MACOM Technology and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Singapore Reinsurance
The main advantage of trading using opposite MACOM Technology and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology 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.| MACOM Technology vs. NVIDIA | MACOM Technology vs. Taiwan Semiconductor Manufacturing | MACOM Technology vs. Broadcom | MACOM Technology vs. QUALCOMM Incorporated |
| Singapore Reinsurance vs. GMO Internet | Singapore Reinsurance vs. Sumitomo Rubber Industries | Singapore Reinsurance vs. MACOM Technology Solutions | Singapore Reinsurance vs. Charter Communications |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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