Correlation Between Singapore Reinsurance and Moncler SpA

Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and Moncler SpA 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 Moncler SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Singapore Reinsurance and Moncler SpA, you can compare the effects of market volatilities on Singapore Reinsurance and Moncler SpA 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 Moncler SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and Moncler SpA.

Diversification Opportunities for Singapore Reinsurance and Moncler SpA

-0.78

Correlation Coefficient

Singapore Reinsurance  Moncler SpA

Pay attention - limited upside

The 3 months correlation between Singapore and Moncler is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA 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 Moncler SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moncler SpA has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and Moncler SpA go up and down completely randomly.

Pair Corralation between Singapore Reinsurance and Moncler SpA

Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 1.2 times more return on investment than Moncler SpA. However, Singapore Reinsurance is 1.2 times more volatile than Moncler SpA. It trades about 0.15 of its potential returns per unit of risk. Moncler SpA is currently generating about -0.07 per unit of risk. If you would invest  3,000  in Singapore Reinsurance on October 11, 2024 and sell it today you would earn a total of  620.00  from holding Singapore Reinsurance or generate 20.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Singapore Reinsurance  vs.  Moncler SpA

Singapore Reinsurance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Reinsurance are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Singapore Reinsurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Moncler SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moncler SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Singapore Reinsurance and Moncler SpA

The main advantage of trading using opposite Singapore Reinsurance and Moncler SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, Moncler SpA 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 Moncler SpA will offset losses from the drop in Moncler SpA's long position.

The idea behind Singapore Reinsurance and Moncler SpA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.