Correlation Between China Mobile and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both China Mobile 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 China Mobile and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mobile Limited and Singapore Telecommunications Limited, you can compare the effects of market volatilities on China Mobile 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 China Mobile with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Singapore Telecommunicatio.
Diversification Opportunities for China Mobile and Singapore Telecommunicatio
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Singapore is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and China Mobile 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 China Mobile Limited 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 China Mobile i.e., China Mobile and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between China Mobile and Singapore Telecommunicatio
Assuming the 90 days horizon China Mobile Limited is expected to under-perform the Singapore Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, China Mobile Limited is 4.1 times less risky than Singapore Telecommunicatio. The stock trades about -0.04 of its potential returns per unit of risk. The Singapore Telecommunications Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Singapore Telecommunications Limited on August 24, 2024 and sell it today you would earn a total of 4.00 from holding Singapore Telecommunications Limited or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. Singapore Telecommunications L
Performance |
| Timeline |
| China Mobile Limited |
| Singapore Telecommunicatio |
China Mobile and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Singapore Telecommunicatio
The main advantage of trading using opposite China Mobile and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile 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.| China Mobile vs. Apollo Investment Corp | China Mobile vs. WisdomTree Investments | China Mobile vs. Gladstone Investment | China Mobile vs. Advanced Medical Solutions |
| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG | 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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