Correlation Between Singapore Reinsurance and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and Boston Beer 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 Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and The Boston Beer, you can compare the effects of market volatilities on Singapore Reinsurance and Boston Beer 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 Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and Boston Beer.
Diversification Opportunities for Singapore Reinsurance and Boston Beer
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Singapore and Boston is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and The Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer 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 Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and Boston Beer go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and Boston Beer
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 0.88 times more return on investment than Boston Beer. However, Singapore Reinsurance is 1.13 times less risky than Boston Beer. It trades about 0.05 of its potential returns per unit of risk. The Boston Beer is currently generating about -0.38 per unit of risk. If you would invest 3,520 in Singapore Reinsurance on October 12, 2024 and sell it today you would earn a total of 40.00 from holding Singapore Reinsurance or generate 1.14% 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. The Boston Beer
Performance |
| Timeline |
| Singapore Reinsurance |
| Boston Beer |
Singapore Reinsurance and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and Boston Beer
The main advantage of trading using opposite Singapore Reinsurance and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer's long position.| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc |
| Boston Beer vs. Singapore Reinsurance | Boston Beer vs. Townsquare Media | Boston Beer vs. GigaMedia | Boston Beer vs. ANTA SPORTS PRODUCT |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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