Correlation Between Abbott Laboratories and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories 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 Abbott Laboratories and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and Singapore Telecommunications Limited, you can compare the effects of market volatilities on Abbott Laboratories 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 Abbott Laboratories with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and Singapore Telecommunicatio.
Diversification Opportunities for Abbott Laboratories and Singapore Telecommunicatio
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Abbott and Singapore is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Abbott Laboratories 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 Abbott Laboratories 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 Abbott Laboratories i.e., Abbott Laboratories and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Abbott Laboratories and Singapore Telecommunicatio
Assuming the 90 days horizon Abbott Laboratories is expected to generate 2.11 times less return on investment than Singapore Telecommunicatio. But when comparing it to its historical volatility, Abbott Laboratories is 1.2 times less risky than Singapore Telecommunicatio. It trades about 0.02 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Singapore Telecommunications Limited on September 3, 2024 and sell it today you would earn a total of 51.00 from holding Singapore Telecommunications Limited or generate 30.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbott Laboratories vs. Singapore Telecommunications L
Performance |
| Timeline |
| Abbott Laboratories |
| Singapore Telecommunicatio |
Abbott Laboratories and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and Singapore Telecommunicatio
The main advantage of trading using opposite Abbott Laboratories and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories 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.| Abbott Laboratories vs. TITANIUM TRANSPORTGROUP | Abbott Laboratories vs. BII Railway Transportation | Abbott Laboratories vs. CODERE ONLINE LUX | Abbott Laboratories vs. Air Transport Services |
| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. China Mobile Limited | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Nippon Telegraph and |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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