Correlation Between Singapore Reinsurance and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and Fortune Brands 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 Reinsurance and Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and Fortune Brands Home, you can compare the effects of market volatilities on Singapore Reinsurance and Fortune Brands 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 Reinsurance with a short position of Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and Fortune Brands.
Diversification Opportunities for Singapore Reinsurance and Fortune Brands
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Singapore and Fortune is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home and Singapore Reinsurance 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and Fortune Brands go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and Fortune Brands
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 1.48 times less return on investment than Fortune Brands. In addition to that, Singapore Reinsurance is 1.19 times more volatile than Fortune Brands Home. It trades about 0.12 of its total potential returns per unit of risk. Fortune Brands Home is currently generating about 0.2 per unit of volatility. If you would invest 6,600 in Fortune Brands Home on October 29, 2024 and sell it today you would earn a total of 350.00 from holding Fortune Brands Home or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. Fortune Brands Home
Performance |
| Timeline |
| Singapore Reinsurance |
| Fortune Brands Home |
Singapore Reinsurance and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and Fortune Brands
The main advantage of trading using opposite Singapore Reinsurance and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Singapore Reinsurance vs. UNITED RENTALS | Singapore Reinsurance vs. United Rentals | Singapore Reinsurance vs. MARKET VECTR RETAIL | Singapore Reinsurance vs. Fast Retailing Co |
| Fortune Brands vs. FUYO GENERAL LEASE | Fortune Brands vs. Global Ship Lease | Fortune Brands vs. Lendlease Group | Fortune Brands vs. Singapore Reinsurance |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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