Correlation Between Singapore Reinsurance and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and PT Indofood 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 PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and PT Indofood Sukses, you can compare the effects of market volatilities on Singapore Reinsurance and PT Indofood 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 PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and PT Indofood.
Diversification Opportunities for Singapore Reinsurance and PT Indofood
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Singapore and ISM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses 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 PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and PT Indofood go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and PT Indofood
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 9.43 times less return on investment than PT Indofood. But when comparing it to its historical volatility, Singapore Reinsurance is 1.9 times less risky than PT Indofood. It trades about 0.03 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 44.00 in PT Indofood Sukses on September 15, 2024 and sell it today you would earn a total of 3.00 from holding PT Indofood Sukses or generate 6.82% 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. PT Indofood Sukses
Performance |
| Timeline |
| Singapore Reinsurance |
| PT Indofood Sukses |
Singapore Reinsurance and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and PT Indofood
The main advantage of trading using opposite Singapore Reinsurance and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, PT Indofood 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 PT Indofood will offset losses from the drop in PT Indofood's long position.| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc |
| PT Indofood vs. Hormel Foods | PT Indofood vs. Superior Plus Corp | PT Indofood vs. SIVERS SEMICONDUCTORS AB | PT Indofood vs. NorAm Drilling AS |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |