Correlation Between TIANDE CHEMICAL and Singapore Reinsurance

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

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

Diversification Opportunities for TIANDE CHEMICAL and Singapore Reinsurance

0.0

Correlation Coefficient

TIANDE CHEMICAL  Singapore Reinsurance

Pay attention - limited upside

The 3 months correlation between TIANDE and Singapore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE CHEMICAL and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance and TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL i.e., TIANDE CHEMICAL and Singapore Reinsurance go up and down completely randomly.

Pair Corralation between TIANDE CHEMICAL and Singapore Reinsurance

If you would invest  7.25  in TIANDE CHEMICAL on December 22, 2024 and sell it today you would earn a total of  0.00  from holding TIANDE CHEMICAL or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

TIANDE CHEMICAL  vs.  Singapore Reinsurance

TIANDE CHEMICAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days TIANDE CHEMICAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, TIANDE CHEMICAL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Singapore Reinsurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Singapore Reinsurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with TIANDE CHEMICAL and Singapore Reinsurance

The main advantage of trading using opposite TIANDE CHEMICAL and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE CHEMICAL 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.

The idea behind TIANDE CHEMICAL and Singapore Reinsurance 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.