Correlation Between CEOTRONICS and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both CEOTRONICS 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 CEOTRONICS and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEOTRONICS and Singapore Telecommunications Limited, you can compare the effects of market volatilities on CEOTRONICS 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 CEOTRONICS with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEOTRONICS and Singapore Telecommunicatio.
Diversification Opportunities for CEOTRONICS and Singapore Telecommunicatio
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CEOTRONICS and Singapore is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and CEOTRONICS 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 CEOTRONICS 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 CEOTRONICS i.e., CEOTRONICS and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between CEOTRONICS and Singapore Telecommunicatio
Assuming the 90 days trading horizon CEOTRONICS is expected to generate 2.11 times more return on investment than Singapore Telecommunicatio. However, CEOTRONICS is 2.11 times more volatile than Singapore Telecommunications Limited. It trades about 0.16 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.02 per unit of risk. If you would invest 555.00 in CEOTRONICS on September 13, 2024 and sell it today you would earn a total of 80.00 from holding CEOTRONICS or generate 14.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEOTRONICS vs. Singapore Telecommunications L
Performance |
| Timeline |
| CEOTRONICS |
| Singapore Telecommunicatio |
CEOTRONICS and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEOTRONICS and Singapore Telecommunicatio
The main advantage of trading using opposite CEOTRONICS and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEOTRONICS 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.The idea behind CEOTRONICS and Singapore Telecommunications Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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