Correlation Between APPLIED MATERIALS and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS 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 APPLIED MATERIALS and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and Singapore Reinsurance, you can compare the effects of market volatilities on APPLIED MATERIALS 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 APPLIED MATERIALS with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and Singapore Reinsurance.
Diversification Opportunities for APPLIED MATERIALS and Singapore Reinsurance
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between APPLIED and Singapore is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS i.e., APPLIED MATERIALS and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and Singapore Reinsurance
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to under-perform the Singapore Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, APPLIED MATERIALS is 1.07 times less risky than Singapore Reinsurance. The stock trades about -0.02 of its potential returns per unit of risk. The Singapore Reinsurance is currently generating about 0.18 of returns per unit of risk over similar time horizon. 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 |
APPLIED MATERIALS vs. Singapore Reinsurance
Performance |
| Timeline |
| APPLIED MATERIALS |
| Singapore Reinsurance |
APPLIED MATERIALS and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and Singapore Reinsurance
The main advantage of trading using opposite APPLIED MATERIALS and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS 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.| APPLIED MATERIALS vs. SBM OFFSHORE | APPLIED MATERIALS vs. Wizz Air Holdings | APPLIED MATERIALS vs. Selective Insurance Group | APPLIED MATERIALS vs. Japan Post Insurance |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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