Correlation Between Singapore Reinsurance and MSAD INSURANCE
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and MSAD INSURANCE 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 MSAD INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and MSAD INSURANCE, you can compare the effects of market volatilities on Singapore Reinsurance and MSAD INSURANCE 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 MSAD INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and MSAD INSURANCE.
Diversification Opportunities for Singapore Reinsurance and MSAD INSURANCE
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singapore and MSAD is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and MSAD INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSAD INSURANCE 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 MSAD INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSAD INSURANCE has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and MSAD INSURANCE go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and MSAD INSURANCE
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 1.91 times more return on investment than MSAD INSURANCE. However, Singapore Reinsurance is 1.91 times more volatile than MSAD INSURANCE. It trades about 0.15 of its potential returns per unit of risk. MSAD INSURANCE is currently generating about 0.09 per unit of risk. If you would invest 3,100 in Singapore Reinsurance on August 24, 2024 and sell it today you would earn a total of 300.00 from holding Singapore Reinsurance or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. MSAD INSURANCE
Performance |
| Timeline |
| Singapore Reinsurance |
| MSAD INSURANCE |
Singapore Reinsurance and MSAD INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and MSAD INSURANCE
The main advantage of trading using opposite Singapore Reinsurance and MSAD INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, MSAD INSURANCE 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 MSAD INSURANCE will offset losses from the drop in MSAD INSURANCE's long position.| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc |
| MSAD INSURANCE vs. Apple Inc | MSAD INSURANCE vs. Apple Inc | MSAD INSURANCE vs. Apple Inc | MSAD INSURANCE vs. Apple Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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