Correlation Between Singapore Reinsurance and SHIN ETSU
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and SHIN ETSU 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 SHIN ETSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and SHIN ETSU CHEMICAL , you can compare the effects of market volatilities on Singapore Reinsurance and SHIN ETSU 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 SHIN ETSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and SHIN ETSU.
Diversification Opportunities for Singapore Reinsurance and SHIN ETSU
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Singapore and SHIN is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and SHIN ETSU CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIN ETSU CHEMICAL 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 SHIN ETSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIN ETSU CHEMICAL has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and SHIN ETSU go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and SHIN ETSU
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 1.68 times more return on investment than SHIN ETSU. However, Singapore Reinsurance is 1.68 times more volatile than SHIN ETSU CHEMICAL . It trades about 0.13 of its potential returns per unit of risk. SHIN ETSU CHEMICAL is currently generating about -0.34 per unit of risk. If you would invest 3,460 in Singapore Reinsurance on October 13, 2024 and sell it today you would earn a total of 120.00 from holding Singapore Reinsurance or generate 3.47% 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. SHIN ETSU CHEMICAL
Performance |
| Timeline |
| Singapore Reinsurance |
| SHIN ETSU CHEMICAL |
Singapore Reinsurance and SHIN ETSU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and SHIN ETSU
The main advantage of trading using opposite Singapore Reinsurance and SHIN ETSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, SHIN ETSU 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 SHIN ETSU will offset losses from the drop in SHIN ETSU's long position.| Singapore Reinsurance vs. ELMOS SEMICONDUCTOR | Singapore Reinsurance vs. NXP Semiconductors NV | Singapore Reinsurance vs. CHEMICAL INDUSTRIES | Singapore Reinsurance vs. Hua Hong Semiconductor |
| SHIN ETSU vs. MeVis Medical Solutions | SHIN ETSU vs. Martin Marietta Materials | SHIN ETSU vs. Sumitomo Rubber Industries | SHIN ETSU vs. CompuGroup Medical SE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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