Correlation Between Charter Communications and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both Charter Communications 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 Charter Communications and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Singapore Reinsurance, you can compare the effects of market volatilities on Charter Communications 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 Charter Communications with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Singapore Reinsurance.
Diversification Opportunities for Charter Communications and Singapore Reinsurance
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charter and Singapore is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and Charter Communications 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 Charter Communications 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 Charter Communications i.e., Charter Communications and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between Charter Communications and Singapore Reinsurance
Assuming the 90 days trading horizon Charter Communications is expected to under-perform the Singapore Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, Charter Communications is 1.64 times less risky than Singapore Reinsurance. The stock trades about -0.01 of its potential returns per unit of risk. The Singapore Reinsurance is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,500 in Singapore Reinsurance on November 8, 2024 and sell it today you would earn a total of 300.00 from holding Singapore Reinsurance or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. Singapore Reinsurance
Performance |
| Timeline |
| Charter Communications |
| Singapore Reinsurance |
Charter Communications and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Singapore Reinsurance
The main advantage of trading using opposite Charter Communications and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications 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.| Charter Communications vs. Khiron Life Sciences | Charter Communications vs. PennantPark Investment | Charter Communications vs. MAANSHAN IRON H | Charter Communications vs. CHRYSALIS INVESTMENTS LTD |
| Singapore Reinsurance vs. Tyson Foods | Singapore Reinsurance vs. MTY Food Group | Singapore Reinsurance vs. Austevoll Seafood ASA | Singapore Reinsurance vs. CORNISH METALS 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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