Correlation Between Singapore ReinsuranceLimit and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both Singapore ReinsuranceLimit and WUXI BIOLOGICS 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 Singapore ReinsuranceLimit and WUXI BIOLOGICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and WUXI BIOLOGICS 00000083, you can compare the effects of market volatilities on Singapore ReinsuranceLimit and WUXI BIOLOGICS 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 Singapore ReinsuranceLimit with a short position of WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore ReinsuranceLimit and WUXI BIOLOGICS.
Diversification Opportunities for Singapore ReinsuranceLimit and WUXI BIOLOGICS
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and WUXI is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and WUXI BIOLOGICS 00000083 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS 00000083 and Singapore ReinsuranceLimit 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 Singapore Reinsurance are associated (or correlated) with WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS 00000083 has no effect on the direction of Singapore ReinsuranceLimit i.e., Singapore ReinsuranceLimit and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between Singapore ReinsuranceLimit and WUXI BIOLOGICS
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 0.68 times more return on investment than WUXI BIOLOGICS. However, Singapore Reinsurance is 1.47 times less risky than WUXI BIOLOGICS. It trades about 0.02 of its potential returns per unit of risk. WUXI BIOLOGICS 00000083 is currently generating about -0.05 per unit of risk. If you would invest 3,540 in Singapore Reinsurance on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Singapore Reinsurance or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. WUXI BIOLOGICS 00000083
Performance |
| Timeline |
| Singapore ReinsuranceLimit |
| WUXI BIOLOGICS 00000083 |
Singapore ReinsuranceLimit and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore ReinsuranceLimit and WUXI BIOLOGICS
The main advantage of trading using opposite Singapore ReinsuranceLimit and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore ReinsuranceLimit position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.The idea behind Singapore Reinsurance and WUXI BIOLOGICS 00000083 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.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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