Correlation Between Singapore Reinsurance and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and Safety Insurance 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 Safety Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and Safety Insurance Group, you can compare the effects of market volatilities on Singapore Reinsurance and Safety Insurance 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and Safety Insurance.
Diversification Opportunities for Singapore Reinsurance and Safety Insurance
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singapore and Safety is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and Safety Insurance go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and Safety Insurance
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 1.7 times more return on investment than Safety Insurance. However, Singapore Reinsurance is 1.7 times more volatile than Safety Insurance Group. It trades about 0.08 of its potential returns per unit of risk. Safety Insurance Group is currently generating about 0.05 per unit of risk. If you would invest 3,120 in Singapore Reinsurance on August 31, 2024 and sell it today you would earn a total of 360.00 from holding Singapore Reinsurance or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. Safety Insurance Group
Performance |
| Timeline |
| Singapore Reinsurance |
| Safety Insurance |
Singapore Reinsurance and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and Safety Insurance
The main advantage of trading using opposite Singapore Reinsurance and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, Safety Insurance 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Singapore Reinsurance vs. ScanSource | Singapore Reinsurance vs. TYSON FOODS A | Singapore Reinsurance vs. ULTRA CLEAN HLDGS | Singapore Reinsurance vs. Cleanaway Waste Management |
| Safety Insurance vs. Chuangs China Investments | Safety Insurance vs. UNIVERSAL MUSIC GROUP | Safety Insurance vs. Gladstone Investment | Safety Insurance vs. BURLINGTON STORES |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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