Correlation Between Japan Post and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Japan Post 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 Japan Post and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Post Insurance and Singapore Telecommunications Limited, you can compare the effects of market volatilities on Japan Post 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 Japan Post with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and Singapore Telecommunicatio.
Diversification Opportunities for Japan Post and Singapore Telecommunicatio
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Japan and Singapore is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Insurance and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Japan Post 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 Japan Post Insurance 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 Japan Post i.e., Japan Post and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Japan Post and Singapore Telecommunicatio
Assuming the 90 days trading horizon Japan Post is expected to generate 1.51 times less return on investment than Singapore Telecommunicatio. But when comparing it to its historical volatility, Japan Post Insurance is 1.06 times less risky than Singapore Telecommunicatio. It trades about 0.03 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 218.00 in Singapore Telecommunications Limited on October 24, 2024 and sell it today you would earn a total of 2.00 from holding Singapore Telecommunications Limited or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Post Insurance vs. Singapore Telecommunications L
Performance |
| Timeline |
| Japan Post Insurance |
| Singapore Telecommunicatio |
Japan Post and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and Singapore Telecommunicatio
The main advantage of trading using opposite Japan Post and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post 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.| Japan Post vs. GAMING FAC SA | Japan Post vs. Games Workshop Group | Japan Post vs. Boyd Gaming | Japan Post vs. QINGCI GAMES INC |
| Singapore Telecommunicatio vs. T MOBILE US | Singapore Telecommunicatio vs. Tencent Music Entertainment | Singapore Telecommunicatio vs. MAVEN WIRELESS SWEDEN | Singapore Telecommunicatio vs. CeoTronics AG |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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