Correlation Between DATANG INTL and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both DATANG INTL 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 DATANG INTL and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATANG INTL POW and Singapore Telecommunications Limited, you can compare the effects of market volatilities on DATANG INTL 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 DATANG INTL with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and Singapore Telecommunicatio.
Diversification Opportunities for DATANG INTL and Singapore Telecommunicatio
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DATANG and Singapore is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and DATANG INTL 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 DATANG INTL POW 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 DATANG INTL i.e., DATANG INTL and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between DATANG INTL and Singapore Telecommunicatio
Assuming the 90 days trading horizon DATANG INTL POW is expected to under-perform the Singapore Telecommunicatio. In addition to that, DATANG INTL is 1.58 times more volatile than Singapore Telecommunications Limited. It trades about -0.08 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.01 per unit of volatility. If you would invest 216.00 in Singapore Telecommunications Limited on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Singapore Telecommunications Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATANG INTL POW vs. Singapore Telecommunications L
Performance |
| Timeline |
| DATANG INTL POW |
| Singapore Telecommunicatio |
DATANG INTL and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and Singapore Telecommunicatio
The main advantage of trading using opposite DATANG INTL and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL 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.| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Superior Plus Corp | DATANG INTL vs. SIVERS SEMICONDUCTORS AB |
| Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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