Correlation Between Singapore Reinsurance and American Woodmark
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and American Woodmark 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 American Woodmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and American Woodmark, you can compare the effects of market volatilities on Singapore Reinsurance and American Woodmark 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 American Woodmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and American Woodmark.
Diversification Opportunities for Singapore Reinsurance and American Woodmark
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and American is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and American Woodmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Woodmark 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 American Woodmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Woodmark has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and American Woodmark go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and American Woodmark
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 1.04 times more return on investment than American Woodmark. However, Singapore Reinsurance is 1.04 times more volatile than American Woodmark. It trades about 0.11 of its potential returns per unit of risk. American Woodmark is currently generating about -0.08 per unit of risk. If you would invest 3,160 in Singapore Reinsurance on October 27, 2024 and sell it today you would earn a total of 460.00 from holding Singapore Reinsurance or generate 14.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Singapore Reinsurance vs. American Woodmark
Performance |
Timeline |
Singapore Reinsurance |
American Woodmark |
Singapore Reinsurance and American Woodmark Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Singapore Reinsurance and American Woodmark
The main advantage of trading using opposite Singapore Reinsurance and American Woodmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, American Woodmark 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 American Woodmark will offset losses from the drop in American Woodmark's long position.Singapore Reinsurance vs. SAFEROADS HLDGS | ||
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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