Correlation Between Singapore Reinsurance and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and Prosiebensat 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 Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and Prosiebensat 1 Media, you can compare the effects of market volatilities on Singapore Reinsurance and Prosiebensat 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 Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and Prosiebensat.
Diversification Opportunities for Singapore Reinsurance and Prosiebensat
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Singapore and Prosiebensat is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media 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 Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and Prosiebensat go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and Prosiebensat
Assuming the 90 days trading horizon Singapore Reinsurance is expected to under-perform the Prosiebensat. But the stock apears to be less risky and, when comparing its historical volatility, Singapore Reinsurance is 2.92 times less risky than Prosiebensat. The stock trades about -0.13 of its potential returns per unit of risk. The Prosiebensat 1 Media is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Prosiebensat 1 Media on September 26, 2024 and sell it today you would earn a total of 26.00 from holding Prosiebensat 1 Media or generate 5.47% 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. Prosiebensat 1 Media
Performance |
| Timeline |
| Singapore Reinsurance |
| Prosiebensat 1 Media |
Singapore Reinsurance and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and Prosiebensat
The main advantage of trading using opposite Singapore Reinsurance and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Microsoft | Singapore Reinsurance vs. Microsoft |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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