Correlation Between Singapore Reinsurance and American Electric
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and American Electric 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 American Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and American Electric Power, you can compare the effects of market volatilities on Singapore Reinsurance and American Electric 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 American Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and American Electric.
Diversification Opportunities for Singapore Reinsurance and American Electric
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and American is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and American Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Electric Power 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 American Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Electric Power has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and American Electric go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and American Electric
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 2.38 times more return on investment than American Electric. However, Singapore Reinsurance is 2.38 times more volatile than American Electric Power. It trades about 0.01 of its potential returns per unit of risk. American Electric Power is currently generating about 0.03 per unit of risk. If you would invest 3,640 in Singapore Reinsurance on August 31, 2024 and sell it today you would lose (160.00) from holding Singapore Reinsurance or give up 4.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Singapore Reinsurance vs. American Electric Power
Performance |
| Timeline |
| Singapore Reinsurance |
| American Electric Power |
Singapore Reinsurance and American Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and American Electric
The main advantage of trading using opposite Singapore Reinsurance and American Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, American Electric 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 American Electric will offset losses from the drop in American Electric's long position.| Singapore Reinsurance vs. ScanSource | Singapore Reinsurance vs. TYSON FOODS A | Singapore Reinsurance vs. ULTRA CLEAN HLDGS | Singapore Reinsurance vs. Cleanaway Waste Management |
| American Electric vs. Singapore Reinsurance | American Electric vs. LIFENET INSURANCE CO | American Electric vs. HANOVER INSURANCE | American Electric vs. Infrastrutture Wireless Italiane |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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