Correlation Between Disney and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Singapore Telecommunications PK, you can compare the effects of market volatilities on Disney 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 Disney with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Singapore Telecommunicatio.
Diversification Opportunities for Disney and Singapore Telecommunicatio
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Disney and Singapore is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Disney 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 Walt Disney 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 Disney i.e., Disney and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Disney and Singapore Telecommunicatio
Considering the 90-day investment horizon Walt Disney is expected to generate 1.21 times more return on investment than Singapore Telecommunicatio. However, Disney is 1.21 times more volatile than Singapore Telecommunications PK. It trades about 0.47 of its potential returns per unit of risk. Singapore Telecommunications PK is currently generating about -0.22 per unit of risk. If you would invest 9,620 in Walt Disney on August 29, 2024 and sell it today you would earn a total of 2,085 from holding Walt Disney or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Singapore Telecommunications P
Performance |
| Timeline |
| Walt Disney |
| Singapore Telecommunicatio |
Disney and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Singapore Telecommunicatio
The main advantage of trading using opposite Disney and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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