Correlation Between Pure Storage and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Pure Storage 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 Pure Storage and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and Singapore Telecommunications Limited, you can compare the effects of market volatilities on Pure Storage 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 Pure Storage with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and Singapore Telecommunicatio.
Diversification Opportunities for Pure Storage and Singapore Telecommunicatio
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pure and Singapore is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Pure Storage 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 Pure Storage 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 Pure Storage i.e., Pure Storage and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Pure Storage and Singapore Telecommunicatio
Assuming the 90 days horizon Pure Storage is expected to generate 1.89 times more return on investment than Singapore Telecommunicatio. However, Pure Storage is 1.89 times more volatile than Singapore Telecommunications Limited. It trades about 0.05 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.06 per unit of risk. If you would invest 3,426 in Pure Storage on August 26, 2024 and sell it today you would earn a total of 1,354 from holding Pure Storage or generate 39.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pure Storage vs. Singapore Telecommunications L
Performance |
| Timeline |
| Pure Storage |
| Singapore Telecommunicatio |
Pure Storage and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Storage and Singapore Telecommunicatio
The main advantage of trading using opposite Pure Storage and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage 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.| Pure Storage vs. Taiwan Semiconductor Manufacturing | Pure Storage vs. FORWARD AIR P | Pure Storage vs. Elmos Semiconductor SE | Pure Storage vs. NXP Semiconductors NV |
| Singapore Telecommunicatio vs. SHIN ETSU CHEMICAL | Singapore Telecommunicatio vs. Public Storage | Singapore Telecommunicatio vs. Eastman Chemical | Singapore Telecommunicatio vs. KINGBOARD CHEMICAL |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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