Correlation Between AUTO TRADER and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both AUTO TRADER 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 AUTO TRADER and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUTO TRADER ADR and Singapore Reinsurance, you can compare the effects of market volatilities on AUTO TRADER 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 AUTO TRADER with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTO TRADER and Singapore Reinsurance.
Diversification Opportunities for AUTO TRADER and Singapore Reinsurance
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AUTO and Singapore is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding AUTO TRADER ADR and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and AUTO TRADER 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 AUTO TRADER ADR 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 AUTO TRADER i.e., AUTO TRADER and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between AUTO TRADER and Singapore Reinsurance
Assuming the 90 days trading horizon AUTO TRADER ADR is expected to under-perform the Singapore Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, AUTO TRADER ADR is 1.48 times less risky than Singapore Reinsurance. The stock trades about -0.07 of its potential returns per unit of risk. The Singapore Reinsurance is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,120 in Singapore Reinsurance on November 2, 2024 and sell it today you would earn a total of 600.00 from holding Singapore Reinsurance or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUTO TRADER ADR vs. Singapore Reinsurance
Performance |
| Timeline |
| AUTO TRADER ADR |
| Singapore Reinsurance |
AUTO TRADER and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUTO TRADER and Singapore Reinsurance
The main advantage of trading using opposite AUTO TRADER and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUTO TRADER 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.| AUTO TRADER vs. Alphabet Class A | AUTO TRADER vs. Meta Platforms | AUTO TRADER vs. Tencent Holdings Ltd | AUTO TRADER vs. Tencent Holdings |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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