Correlation Between Singapore Reinsurance and GRUPO CARSO-A1
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and GRUPO CARSO-A1 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 GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and GRUPO CARSO A1, you can compare the effects of market volatilities on Singapore Reinsurance and GRUPO CARSO-A1 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 GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and GRUPO CARSO-A1.
Diversification Opportunities for Singapore Reinsurance and GRUPO CARSO-A1
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and GRUPO is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 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 GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and GRUPO CARSO-A1 go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and GRUPO CARSO-A1
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 0.62 times more return on investment than GRUPO CARSO-A1. However, Singapore Reinsurance is 1.62 times less risky than GRUPO CARSO-A1. It trades about 0.18 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.05 per unit of risk. If you would invest 3,140 in Singapore Reinsurance on September 2, 2024 and sell it today you would earn a total of 340.00 from holding Singapore Reinsurance or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. GRUPO CARSO A1
Performance |
| Timeline |
| Singapore Reinsurance |
| GRUPO CARSO A1 |
Singapore Reinsurance and GRUPO CARSO-A1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and GRUPO CARSO-A1
The main advantage of trading using opposite Singapore Reinsurance and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.| Singapore Reinsurance vs. SIVERS SEMICONDUCTORS AB | Singapore Reinsurance vs. Darden Restaurants | Singapore Reinsurance vs. Reliance Steel Aluminum | Singapore Reinsurance vs. Q2M Managementberatung AG |
| GRUPO CARSO-A1 vs. SIVERS SEMICONDUCTORS AB | GRUPO CARSO-A1 vs. Darden Restaurants | GRUPO CARSO-A1 vs. Reliance Steel Aluminum | GRUPO CARSO-A1 vs. Q2M Managementberatung AG |
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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