Correlation Between COMMERCIAL VEHICLE and Singapore ReinsuranceLimit
Can any of the company-specific risk be diversified away by investing in both COMMERCIAL VEHICLE and Singapore ReinsuranceLimit 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 COMMERCIAL VEHICLE and Singapore ReinsuranceLimit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMMERCIAL VEHICLE and Singapore Reinsurance, you can compare the effects of market volatilities on COMMERCIAL VEHICLE and Singapore ReinsuranceLimit 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 COMMERCIAL VEHICLE with a short position of Singapore ReinsuranceLimit. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL VEHICLE and Singapore ReinsuranceLimit.
Diversification Opportunities for COMMERCIAL VEHICLE and Singapore ReinsuranceLimit
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between COMMERCIAL and Singapore is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL VEHICLE and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore ReinsuranceLimit and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE are associated (or correlated) with Singapore ReinsuranceLimit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore ReinsuranceLimit has no effect on the direction of COMMERCIAL VEHICLE i.e., COMMERCIAL VEHICLE and Singapore ReinsuranceLimit go up and down completely randomly.
Pair Corralation between COMMERCIAL VEHICLE and Singapore ReinsuranceLimit
Assuming the 90 days trading horizon COMMERCIAL VEHICLE is expected to under-perform the Singapore ReinsuranceLimit. In addition to that, COMMERCIAL VEHICLE is 1.73 times more volatile than Singapore Reinsurance. It trades about -0.12 of its total potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.12 per unit of volatility. If you would invest 2,520 in Singapore Reinsurance on September 3, 2024 and sell it today you would earn a total of 1,040 from holding Singapore Reinsurance or generate 41.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMMERCIAL VEHICLE vs. Singapore Reinsurance
Performance |
| Timeline |
| COMMERCIAL VEHICLE |
| Singapore ReinsuranceLimit |
COMMERCIAL VEHICLE and Singapore ReinsuranceLimit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL VEHICLE and Singapore ReinsuranceLimit
The main advantage of trading using opposite COMMERCIAL VEHICLE and Singapore ReinsuranceLimit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL VEHICLE position performs unexpectedly, Singapore ReinsuranceLimit 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 ReinsuranceLimit will offset losses from the drop in Singapore ReinsuranceLimit's long position.| COMMERCIAL VEHICLE vs. JD SPORTS FASH | COMMERCIAL VEHICLE vs. ARISTOCRAT LEISURE | COMMERCIAL VEHICLE vs. United Utilities Group | COMMERCIAL VEHICLE vs. Columbia Sportswear |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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