Correlation Between Penn National and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both Penn National 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 Penn National and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penn National Gaming and Singapore Reinsurance, you can compare the effects of market volatilities on Penn National 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 Penn National with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Singapore Reinsurance.
Diversification Opportunities for Penn National and Singapore Reinsurance
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penn and Singapore is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and Penn National 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 Penn National Gaming 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 Penn National i.e., Penn National and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between Penn National and Singapore Reinsurance
Assuming the 90 days horizon Penn National is expected to generate 2.36 times less return on investment than Singapore Reinsurance. In addition to that, Penn National is 2.32 times more volatile than Singapore Reinsurance. It trades about 0.04 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 |
Penn National Gaming vs. Singapore Reinsurance
Performance |
| Timeline |
| Penn National Gaming |
| Singapore Reinsurance |
Penn National and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and Singapore Reinsurance
The main advantage of trading using opposite Penn National and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National 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.| Penn National vs. Jupiter Fund Management | Penn National vs. SENECA FOODS A | Penn National vs. National Beverage Corp | Penn National vs. Q2M Managementberatung AG |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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