Correlation Between SEALED AIR and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both SEALED AIR 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 SEALED AIR and Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and Singapore Reinsurance, you can compare the effects of market volatilities on SEALED AIR 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 SEALED AIR with a short position of Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and Singapore Reinsurance.
Diversification Opportunities for SEALED AIR and Singapore Reinsurance
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEALED and Singapore is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and SEALED AIR 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 SEALED AIR 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 SEALED AIR i.e., SEALED AIR and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between SEALED AIR and Singapore Reinsurance
Assuming the 90 days trading horizon SEALED AIR is expected to generate 25.09 times less return on investment than Singapore Reinsurance. But when comparing it to its historical volatility, SEALED AIR is 1.38 times less risky than Singapore Reinsurance. It trades about 0.01 of its potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,460 in Singapore Reinsurance on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Singapore Reinsurance or generate 40.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEALED AIR vs. Singapore Reinsurance
Performance |
| Timeline |
| SEALED AIR |
| Singapore Reinsurance |
SEALED AIR and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and Singapore Reinsurance
The main advantage of trading using opposite SEALED AIR and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR 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.| SEALED AIR vs. American Eagle Outfitters | SEALED AIR vs. Safety Insurance Group | SEALED AIR vs. Goosehead Insurance | SEALED AIR vs. JD SPORTS FASH |
| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Superior Plus Corp | Singapore Reinsurance vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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