Correlation Between RenaissanceRe Holdings and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both RenaissanceRe Holdings and Singapore Telecommunicatio 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 RenaissanceRe Holdings and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RenaissanceRe Holdings and Singapore Telecommunications Limited, you can compare the effects of market volatilities on RenaissanceRe Holdings and Singapore Telecommunicatio 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 RenaissanceRe Holdings with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of RenaissanceRe Holdings and Singapore Telecommunicatio.
Diversification Opportunities for RenaissanceRe Holdings and Singapore Telecommunicatio
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RenaissanceRe and Singapore is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding RenaissanceRe Holdings and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and RenaissanceRe Holdings 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 RenaissanceRe Holdings are associated (or correlated) with Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of RenaissanceRe Holdings i.e., RenaissanceRe Holdings and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between RenaissanceRe Holdings and Singapore Telecommunicatio
Assuming the 90 days horizon RenaissanceRe Holdings is expected to generate 1.04 times less return on investment than Singapore Telecommunicatio. In addition to that, RenaissanceRe Holdings is 1.17 times more volatile than Singapore Telecommunications Limited. It trades about 0.04 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.05 per unit of volatility. If you would invest 157.00 in Singapore Telecommunications Limited on October 11, 2024 and sell it today you would earn a total of 62.00 from holding Singapore Telecommunications Limited or generate 39.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RenaissanceRe Holdings vs. Singapore Telecommunications L
Performance |
| Timeline |
| RenaissanceRe Holdings |
| Singapore Telecommunicatio |
RenaissanceRe Holdings and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RenaissanceRe Holdings and Singapore Telecommunicatio
The main advantage of trading using opposite RenaissanceRe Holdings and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RenaissanceRe Holdings position performs unexpectedly, Singapore Telecommunicatio 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 Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's long position.| RenaissanceRe Holdings vs. OPKO HEALTH | RenaissanceRe Holdings vs. Cardinal Health | RenaissanceRe Holdings vs. Aegean Airlines SA | RenaissanceRe Holdings vs. YOOMA WELLNESS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |