Correlation Between REVO INSURANCE and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and Singapore Telecommunications Limited, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and Singapore Telecommunicatio.
Diversification Opportunities for REVO INSURANCE and Singapore Telecommunicatio
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between REVO and Singapore is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between REVO INSURANCE and Singapore Telecommunicatio
Assuming the 90 days horizon REVO INSURANCE is expected to generate 1.1 times less return on investment than Singapore Telecommunicatio. But when comparing it to its historical volatility, REVO INSURANCE SPA is 1.14 times less risky than Singapore Telecommunicatio. It trades about 0.05 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 159.00 in Singapore Telecommunications Limited on November 9, 2024 and sell it today you would earn a total of 66.00 from holding Singapore Telecommunications Limited or generate 41.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. Singapore Telecommunications L
Performance |
| Timeline |
| REVO INSURANCE SPA |
| Singapore Telecommunicatio |
REVO INSURANCE and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and Singapore Telecommunicatio
The main advantage of trading using opposite REVO INSURANCE and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. China Communications Services | REVO INSURANCE vs. Universal Health Realty | REVO INSURANCE vs. Cairo Communication SpA | REVO INSURANCE vs. Phibro Animal Health |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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