Correlation Between Singapore ReinsuranceLimit and Philip Morris
Can any of the company-specific risk be diversified away by investing in both Singapore ReinsuranceLimit and Philip Morris 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 Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and Philip Morris International, you can compare the effects of market volatilities on Singapore ReinsuranceLimit and Philip Morris 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 Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore ReinsuranceLimit and Philip Morris.
Diversification Opportunities for Singapore ReinsuranceLimit and Philip Morris
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Singapore and Philip is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Philip Morris International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philip Morris Intern 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 Philip Morris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philip Morris Intern has no effect on the direction of Singapore ReinsuranceLimit i.e., Singapore ReinsuranceLimit and Philip Morris go up and down completely randomly.
Pair Corralation between Singapore ReinsuranceLimit and Philip Morris
Assuming the 90 days trading horizon Singapore ReinsuranceLimit is expected to generate 1.94 times less return on investment than Philip Morris. In addition to that, Singapore ReinsuranceLimit is 2.59 times more volatile than Philip Morris International. It trades about 0.02 of its total potential returns per unit of risk. Philip Morris International is currently generating about 0.08 per unit of volatility. If you would invest 8,483 in Philip Morris International on September 3, 2024 and sell it today you would earn a total of 4,051 from holding Philip Morris International or generate 47.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. Philip Morris International
Performance |
| Timeline |
| Singapore ReinsuranceLimit |
| Philip Morris Intern |
Singapore ReinsuranceLimit and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore ReinsuranceLimit and Philip Morris
The main advantage of trading using opposite Singapore ReinsuranceLimit and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore ReinsuranceLimit position performs unexpectedly, Philip Morris 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 Philip Morris will offset losses from the drop in Philip Morris' long position.The idea behind Singapore Reinsurance and Philip Morris International 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.
| Philip Morris vs. British American Tobacco | Philip Morris vs. JAPAN TOBACCO UNSPADR12 | Philip Morris vs. Imperial Brands PLC |
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
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |