Correlation Between GAMESTOP and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both GAMESTOP 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 GAMESTOP and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and Singapore Telecommunications Limited, you can compare the effects of market volatilities on GAMESTOP 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 GAMESTOP with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and Singapore Telecommunicatio.
Diversification Opportunities for GAMESTOP and Singapore Telecommunicatio
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GAMESTOP and Singapore is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and GAMESTOP 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 GAMESTOP 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 GAMESTOP i.e., GAMESTOP and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between GAMESTOP and Singapore Telecommunicatio
Assuming the 90 days trading horizon GAMESTOP is expected to generate 5.59 times more return on investment than Singapore Telecommunicatio. However, GAMESTOP is 5.59 times more volatile than Singapore Telecommunications Limited. It trades about 0.07 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.08 per unit of risk. If you would invest 1,200 in GAMESTOP on August 25, 2024 and sell it today you would earn a total of 1,435 from holding GAMESTOP or generate 119.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
GAMESTOP vs. Singapore Telecommunications L
Performance |
| Timeline |
| GAMESTOP |
| Singapore Telecommunicatio |
GAMESTOP and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and Singapore Telecommunicatio
The main advantage of trading using opposite GAMESTOP and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP 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 GAMESTOP 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.| Singapore Telecommunicatio vs. SHIN ETSU CHEMICAL | Singapore Telecommunicatio vs. Public Storage | Singapore Telecommunicatio vs. Eastman Chemical | Singapore Telecommunicatio vs. KINGBOARD CHEMICAL |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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