Correlation Between Singapore Reinsurance and PT Bank
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and PT Bank 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 Bank 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 Bank Mandiri, you can compare the effects of market volatilities on Singapore Reinsurance and PT Bank 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 Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and PT Bank.
Diversification Opportunities for Singapore Reinsurance and PT Bank
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Singapore and PQ9 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and PT Bank Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Mandiri 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 Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Mandiri has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and PT Bank go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and PT Bank
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 0.22 times more return on investment than PT Bank. However, Singapore Reinsurance is 4.63 times less risky than PT Bank. It trades about 0.15 of its potential returns per unit of risk. PT Bank Mandiri is currently generating about -0.04 per unit of risk. If you would invest 3,320 in Singapore Reinsurance on September 20, 2024 and sell it today you would earn a total of 140.00 from holding Singapore Reinsurance or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. PT Bank Mandiri
Performance |
| Timeline |
| Singapore Reinsurance |
| PT Bank Mandiri |
Singapore Reinsurance and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and PT Bank
The main advantage of trading using opposite Singapore Reinsurance and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, PT Bank 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 Bank will offset losses from the drop in PT Bank's long position.| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Microsoft |
| PT Bank vs. Singapore Reinsurance | PT Bank vs. Safety Insurance Group | PT Bank vs. United Insurance Holdings | PT Bank vs. Siamgas And Petrochemicals |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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