Correlation Between STHREE PLC and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both STHREE PLC and Singapore Reinsurance 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 STHREE PLC and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STHREE PLC LS and Singapore Reinsurance, you can compare the effects of market volatilities on STHREE PLC and Singapore Reinsurance 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 STHREE PLC with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of STHREE PLC and Singapore Reinsurance.
Diversification Opportunities for STHREE PLC and Singapore Reinsurance
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STHREE and Singapore is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding STHREE PLC LS and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and STHREE PLC 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 STHREE PLC LS are associated (or correlated) with Singapore Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Reinsurance has no effect on the direction of STHREE PLC i.e., STHREE PLC and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between STHREE PLC and Singapore Reinsurance
Assuming the 90 days horizon STHREE PLC LS is expected to generate 0.63 times more return on investment than Singapore Reinsurance. However, STHREE PLC LS is 1.6 times less risky than Singapore Reinsurance. It trades about 0.1 of its potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.05 per unit of risk. If you would invest 422.00 in STHREE PLC LS on September 12, 2024 and sell it today you would earn a total of 10.00 from holding STHREE PLC LS or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STHREE PLC LS vs. Singapore Reinsurance
Performance |
| Timeline |
| STHREE PLC LS |
| Singapore Reinsurance |
STHREE PLC and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STHREE PLC and Singapore Reinsurance
The main advantage of trading using opposite STHREE PLC and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STHREE PLC position performs unexpectedly, Singapore Reinsurance 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 Singapore Reinsurance will offset losses from the drop in Singapore Reinsurance's long position.| STHREE PLC vs. Recruit Holdings Co | STHREE PLC vs. Randstad NV | STHREE PLC vs. Adecco Group AG | STHREE PLC vs. Superior Plus Corp |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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