Correlation Between Halma Plc and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both Halma Plc 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 Halma Plc and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halma plc and Singapore Reinsurance, you can compare the effects of market volatilities on Halma Plc 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 Halma Plc with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halma Plc and Singapore Reinsurance.
Diversification Opportunities for Halma Plc and Singapore Reinsurance
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Halma and Singapore is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Halma plc and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and Halma Plc 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 Halma plc 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 Halma Plc i.e., Halma Plc and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between Halma Plc and Singapore Reinsurance
Assuming the 90 days horizon Halma plc is expected to under-perform the Singapore Reinsurance. In addition to that, Halma Plc is 1.07 times more volatile than Singapore Reinsurance. It trades about -0.1 of its total potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.22 per unit of volatility. If you would invest 3,460 in Singapore Reinsurance on October 17, 2024 and sell it today you would earn a total of 220.00 from holding Singapore Reinsurance or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Halma plc vs. Singapore Reinsurance
Performance |
| Timeline |
| Halma plc |
| Singapore Reinsurance |
Halma Plc and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halma Plc and Singapore Reinsurance
The main advantage of trading using opposite Halma Plc and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halma Plc 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.| Halma Plc vs. NH HOTEL GROUP | Halma Plc vs. Park Hotels Resorts | Halma Plc vs. Singapore Reinsurance | Halma Plc vs. The Hanover Insurance |
| Singapore Reinsurance vs. Summit Materials | Singapore Reinsurance vs. Penn National Gaming | Singapore Reinsurance vs. Media and Games | Singapore Reinsurance vs. OURGAME INTHOLDL 00005 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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