Correlation Between GRUPO CARSO-A1 and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 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 GRUPO CARSO-A1 and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRUPO CARSO A1 and Singapore Reinsurance, you can compare the effects of market volatilities on GRUPO CARSO-A1 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 GRUPO CARSO-A1 with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and Singapore Reinsurance.
Diversification Opportunities for GRUPO CARSO-A1 and Singapore Reinsurance
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between GRUPO and Singapore is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and GRUPO CARSO-A1 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 GRUPO CARSO A1 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 GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between GRUPO CARSO-A1 and Singapore Reinsurance
Assuming the 90 days trading horizon GRUPO CARSO-A1 is expected to generate 2.33 times less return on investment than Singapore Reinsurance. In addition to that, GRUPO CARSO-A1 is 1.62 times more volatile than Singapore Reinsurance. It trades about 0.05 of its total potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.18 per unit of volatility. If you would invest 3,140 in Singapore Reinsurance on September 2, 2024 and sell it today you would earn a total of 340.00 from holding Singapore Reinsurance or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRUPO CARSO A1 vs. Singapore Reinsurance
Performance |
| Timeline |
| GRUPO CARSO A1 |
| Singapore Reinsurance |
GRUPO CARSO-A1 and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPO CARSO-A1 and Singapore Reinsurance
The main advantage of trading using opposite GRUPO CARSO-A1 and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO-A1 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.| GRUPO CARSO-A1 vs. SIVERS SEMICONDUCTORS AB | GRUPO CARSO-A1 vs. Darden Restaurants | GRUPO CARSO-A1 vs. Reliance Steel Aluminum | GRUPO CARSO-A1 vs. Q2M Managementberatung AG |
| Singapore Reinsurance vs. SIVERS SEMICONDUCTORS AB | Singapore Reinsurance vs. Darden Restaurants | Singapore Reinsurance vs. Reliance Steel Aluminum | Singapore Reinsurance vs. Q2M Managementberatung AG |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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