Correlation Between Singapore Reinsurance and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and Xinhua Winshare 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 Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Singapore Reinsurance and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and Xinhua Winshare.
Diversification Opportunities for Singapore Reinsurance and Xinhua Winshare
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singapore and Xinhua is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and Xinhua Winshare
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 0.79 times more return on investment than Xinhua Winshare. However, Singapore Reinsurance is 1.27 times less risky than Xinhua Winshare. It trades about 0.14 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about -0.22 per unit of risk. If you would invest 3,540 in Singapore Reinsurance on November 3, 2024 and sell it today you would earn a total of 180.00 from holding Singapore Reinsurance or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Singapore Reinsurance vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Singapore Reinsurance |
| Xinhua Winshare Publ |
Singapore Reinsurance and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and Xinhua Winshare
The main advantage of trading using opposite Singapore Reinsurance and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| Singapore Reinsurance vs. LG Display Co | Singapore Reinsurance vs. Lifeway Foods | Singapore Reinsurance vs. PREMIER FOODS | Singapore Reinsurance vs. MONEYSUPERMARKET |
| Xinhua Winshare vs. SBI Insurance Group | Xinhua Winshare vs. REVO INSURANCE SPA | Xinhua Winshare vs. GOLD ROAD RES | Xinhua Winshare vs. Vienna Insurance Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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