Correlation Between Singtex Industrial and Eclat Textile
Can any of the company-specific risk be diversified away by investing in both Singtex Industrial and Eclat Textile 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 Singtex Industrial and Eclat Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singtex Industrial Co and Eclat Textile Co, you can compare the effects of market volatilities on Singtex Industrial and Eclat Textile 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 Singtex Industrial with a short position of Eclat Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singtex Industrial and Eclat Textile.
Diversification Opportunities for Singtex Industrial and Eclat Textile
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singtex and Eclat is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Singtex Industrial Co and Eclat Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eclat Textile and Singtex 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 Singtex Industrial Co are associated (or correlated) with Eclat Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eclat Textile has no effect on the direction of Singtex Industrial i.e., Singtex Industrial and Eclat Textile go up and down completely randomly.
Pair Corralation between Singtex Industrial and Eclat Textile
Assuming the 90 days trading horizon Singtex Industrial Co is expected to generate 0.47 times more return on investment than Eclat Textile. However, Singtex Industrial Co is 2.13 times less risky than Eclat Textile. It trades about -0.2 of its potential returns per unit of risk. Eclat Textile Co is currently generating about -0.16 per unit of risk. If you would invest 2,855 in Singtex Industrial Co on September 14, 2024 and sell it today you would lose (85.00) from holding Singtex Industrial Co or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singtex Industrial Co vs. Eclat Textile Co
Performance |
| Timeline |
| Singtex Industrial |
| Eclat Textile |
Singtex Industrial and Eclat Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singtex Industrial and Eclat Textile
The main advantage of trading using opposite Singtex Industrial and Eclat Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singtex Industrial position performs unexpectedly, Eclat Textile 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 Eclat Textile will offset losses from the drop in Eclat Textile's long position.| Singtex Industrial vs. Eclat Textile Co | Singtex Industrial vs. Ruentex Industries | Singtex Industrial vs. Shinkong Synthetic Fiber | Singtex Industrial vs. Taiwan Paiho |
| Eclat Textile vs. Feng Tay Enterprises | Eclat Textile vs. Ruentex Development Co | Eclat Textile vs. WiseChip Semiconductor | Eclat Textile vs. Novatek 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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