Correlation Between ITALIAN WINE and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE 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 ITALIAN WINE and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and Singapore Reinsurance, you can compare the effects of market volatilities on ITALIAN WINE 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 ITALIAN WINE with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Singapore Reinsurance.
Diversification Opportunities for ITALIAN WINE and Singapore Reinsurance
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITALIAN and Singapore is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Singapore Reinsurance
Assuming the 90 days horizon ITALIAN WINE is expected to generate 3.29 times less return on investment than Singapore Reinsurance. In addition to that, ITALIAN WINE is 1.19 times more volatile than Singapore Reinsurance. It trades about 0.06 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 2,740 in Singapore Reinsurance on August 28, 2024 and sell it today you would earn a total of 720.00 from holding Singapore Reinsurance or generate 26.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. Singapore Reinsurance
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| Singapore Reinsurance |
ITALIAN WINE and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Singapore Reinsurance
The main advantage of trading using opposite ITALIAN WINE and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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.| ITALIAN WINE vs. Merit Medical Systems | ITALIAN WINE vs. GOODYEAR T RUBBER | ITALIAN WINE vs. SCANDMEDICAL SOLDK 040 | ITALIAN WINE vs. Apollo Medical Holdings |
| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Microsoft | Singapore Reinsurance vs. Microsoft |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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