Correlation Between TOTAL GABON and Singapore ReinsuranceLimit
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON 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 TOTAL GABON and Singapore ReinsuranceLimit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and Singapore Reinsurance, you can compare the effects of market volatilities on TOTAL GABON 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 TOTAL GABON with a short position of Singapore ReinsuranceLimit. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and Singapore ReinsuranceLimit.
Diversification Opportunities for TOTAL GABON and Singapore ReinsuranceLimit
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TOTAL and Singapore is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore ReinsuranceLimit and TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON i.e., TOTAL GABON and Singapore ReinsuranceLimit go up and down completely randomly.
Pair Corralation between TOTAL GABON and Singapore ReinsuranceLimit
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 1.03 times more return on investment than Singapore ReinsuranceLimit. However, TOTAL GABON is 1.03 times more volatile than Singapore Reinsurance. It trades about 0.1 of its potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.09 per unit of risk. If you would invest 16,050 in TOTAL GABON on September 4, 2024 and sell it today you would earn a total of 2,600 from holding TOTAL GABON or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOTAL GABON vs. Singapore Reinsurance
Performance |
| Timeline |
| TOTAL GABON |
| Singapore ReinsuranceLimit |
TOTAL GABON and Singapore ReinsuranceLimit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and Singapore ReinsuranceLimit
The main advantage of trading using opposite TOTAL GABON and Singapore ReinsuranceLimit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON 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.The idea behind TOTAL GABON and Singapore Reinsurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Singapore ReinsuranceLimit vs. TOTAL GABON | Singapore ReinsuranceLimit vs. Walgreens Boots Alliance | Singapore ReinsuranceLimit vs. Peak Resources Limited |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |