Correlation Between Singapore Reinsurance and Valero Energy
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and Valero Energy 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 Valero Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and Valero Energy, you can compare the effects of market volatilities on Singapore Reinsurance and Valero Energy 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 Valero Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and Valero Energy.
Diversification Opportunities for Singapore Reinsurance and Valero Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singapore and Valero is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Valero Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valero Energy 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 Valero Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valero Energy has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and Valero Energy go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and Valero Energy
Assuming the 90 days trading horizon Singapore Reinsurance is expected to under-perform the Valero Energy. In addition to that, Singapore Reinsurance is 1.29 times more volatile than Valero Energy. It trades about -0.07 of its total potential returns per unit of risk. Valero Energy is currently generating about 0.06 per unit of volatility. If you would invest 11,324 in Valero Energy on December 25, 2024 and sell it today you would earn a total of 742.00 from holding Valero Energy or generate 6.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Singapore Reinsurance vs. Valero Energy
Performance |
Timeline |
Singapore Reinsurance |
Valero Energy |
Singapore Reinsurance and Valero Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Singapore Reinsurance and Valero Energy
The main advantage of trading using opposite Singapore Reinsurance and Valero Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, Valero Energy 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 Valero Energy will offset losses from the drop in Valero Energy's long position.Singapore Reinsurance vs. Transport International Holdings | Singapore Reinsurance vs. VIVA WINE GROUP | Singapore Reinsurance vs. Sporting Clube de | Singapore Reinsurance vs. NTG Nordic Transport |
Valero Energy vs. KIMBALL ELECTRONICS | Valero Energy vs. Sligro Food Group | Valero Energy vs. LIFEWAY FOODS | Valero Energy vs. United Microelectronics Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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