Correlation Between JJ SNACK and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both JJ SNACK 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 JJ SNACK and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJ SNACK FOODS and Singapore Telecommunications Limited, you can compare the effects of market volatilities on JJ SNACK 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 JJ SNACK with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJ SNACK and Singapore Telecommunicatio.
Diversification Opportunities for JJ SNACK and Singapore Telecommunicatio
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between JJ1 and Singapore is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and JJ SNACK 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 JJ SNACK FOODS 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 JJ SNACK i.e., JJ SNACK and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between JJ SNACK and Singapore Telecommunicatio
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.75 times more return on investment than Singapore Telecommunicatio. However, JJ SNACK FOODS is 1.34 times less risky than Singapore Telecommunicatio. It trades about 0.2 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.03 per unit of risk. If you would invest 15,400 in JJ SNACK FOODS on August 30, 2024 and sell it today you would earn a total of 900.00 from holding JJ SNACK FOODS or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Singapore Telecommunications L
Performance |
| Timeline |
| JJ SNACK FOODS |
| Singapore Telecommunicatio |
JJ SNACK and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JJ SNACK and Singapore Telecommunicatio
The main advantage of trading using opposite JJ SNACK and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJ SNACK 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.| JJ SNACK vs. SCANDMEDICAL SOLDK 040 | JJ SNACK vs. Clearside Biomedical | JJ SNACK vs. Caltagirone SpA | JJ SNACK vs. Tianjin Capital Environmental |
| Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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