Correlation Between ADYEN NV and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both ADYEN NV 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 ADYEN NV and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADYEN NV UNSPADR001 and Singapore Reinsurance, you can compare the effects of market volatilities on ADYEN NV 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 ADYEN NV with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADYEN NV and Singapore Reinsurance.
Diversification Opportunities for ADYEN NV and Singapore Reinsurance
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADYEN and Singapore is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ADYEN NV UNSPADR001 and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and ADYEN NV 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 ADYEN NV UNSPADR001 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 ADYEN NV i.e., ADYEN NV and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between ADYEN NV and Singapore Reinsurance
Assuming the 90 days trading horizon ADYEN NV UNSPADR001 is expected to generate 1.32 times more return on investment than Singapore Reinsurance. However, ADYEN NV is 1.32 times more volatile than Singapore Reinsurance. It trades about 0.03 of its potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.02 per unit of risk. If you would invest 1,270 in ADYEN NV UNSPADR001 on September 14, 2024 and sell it today you would earn a total of 190.00 from holding ADYEN NV UNSPADR001 or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADYEN NV UNSPADR001 vs. Singapore Reinsurance
Performance |
| Timeline |
| ADYEN NV UNSPADR001 |
| Singapore Reinsurance |
ADYEN NV and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADYEN NV and Singapore Reinsurance
The main advantage of trading using opposite ADYEN NV and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADYEN NV 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.| ADYEN NV vs. Singapore Reinsurance | ADYEN NV vs. Brockhaus Capital Management | ADYEN NV vs. The Hanover Insurance | ADYEN NV vs. Direct Line Insurance |
| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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