Correlation Between CNH Industrial and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Singapore Telecommunicatio 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 CNH Industrial and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNH Industrial NV and Singapore Telecommunications Limited, you can compare the effects of market volatilities on CNH Industrial and Singapore Telecommunicatio 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 CNH Industrial with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Singapore Telecommunicatio.
Diversification Opportunities for CNH Industrial and Singapore Telecommunicatio
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between CNH and Singapore is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and CNH Industrial 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 CNH Industrial NV are associated (or correlated) with Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of CNH Industrial i.e., CNH Industrial and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between CNH Industrial and Singapore Telecommunicatio
Assuming the 90 days trading horizon CNH Industrial NV is expected to under-perform the Singapore Telecommunicatio. In addition to that, CNH Industrial is 1.35 times more volatile than Singapore Telecommunications Limited. It trades about -0.25 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.1 per unit of volatility. If you would invest 214.00 in Singapore Telecommunications Limited on October 9, 2024 and sell it today you would earn a total of 4.00 from holding Singapore Telecommunications Limited or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
CNH Industrial NV vs. Singapore Telecommunications L
Performance |
| Timeline |
| CNH Industrial NV |
| Singapore Telecommunicatio |
CNH Industrial and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Singapore Telecommunicatio
The main advantage of trading using opposite CNH Industrial and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Singapore Telecommunicatio 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 Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's long position.| CNH Industrial vs. Sterling Construction | CNH Industrial vs. Canon Marketing Japan | CNH Industrial vs. FAST RETAIL ADR | CNH Industrial vs. Tokyu Construction Co |
| Singapore Telecommunicatio vs. Nippon Telegraph and | Singapore Telecommunicatio vs. Superior Plus Corp | Singapore Telecommunicatio vs. NMI Holdings | Singapore Telecommunicatio 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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