Correlation Between Japan Exchange and Singapore Exchange
Can any of the company-specific risk be diversified away by investing in both Japan Exchange and Singapore Exchange 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 Japan Exchange and Singapore Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Exchange Group and Singapore Exchange Ltd, you can compare the effects of market volatilities on Japan Exchange and Singapore Exchange 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 Japan Exchange with a short position of Singapore Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Exchange and Singapore Exchange.
Diversification Opportunities for Japan Exchange and Singapore Exchange
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Japan and Singapore is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Japan Exchange Group and Singapore Exchange Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Exchange and Japan Exchange 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 Japan Exchange Group are associated (or correlated) with Singapore Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Exchange has no effect on the direction of Japan Exchange i.e., Japan Exchange and Singapore Exchange go up and down completely randomly.
Pair Corralation between Japan Exchange and Singapore Exchange
Assuming the 90 days horizon Japan Exchange Group is expected to under-perform the Singapore Exchange. In addition to that, Japan Exchange is 1.19 times more volatile than Singapore Exchange Ltd. It trades about -0.03 of its total potential returns per unit of risk. Singapore Exchange Ltd is currently generating about 0.44 per unit of volatility. If you would invest 1,639 in Singapore Exchange Ltd on August 27, 2024 and sell it today you would earn a total of 258.00 from holding Singapore Exchange Ltd or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Exchange Group vs. Singapore Exchange Ltd
Performance |
| Timeline |
| Japan Exchange Group |
| Singapore Exchange |
Japan Exchange and Singapore Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Exchange and Singapore Exchange
The main advantage of trading using opposite Japan Exchange and Singapore Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Exchange position performs unexpectedly, Singapore Exchange 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 Exchange will offset losses from the drop in Singapore Exchange's long position.| Japan Exchange vs. Hong Kong Exchanges | Japan Exchange vs. Deutsche Boerse AG | Japan Exchange vs. SP Global | Japan Exchange vs. Moodys |
| Singapore Exchange vs. Singapore Exchange Limited | Singapore Exchange vs. TMX Group Limited | Singapore Exchange vs. London Stock Exchange | Singapore Exchange vs. Otc Markets Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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