Correlation Between LION ONE and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and Singapore Telecommunications Limited, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Singapore Telecommunicatio.
Diversification Opportunities for LION ONE and Singapore Telecommunicatio
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between LION and Singapore is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and LION ONE 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 LION ONE METALS 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 LION ONE i.e., LION ONE and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between LION ONE and Singapore Telecommunicatio
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Singapore Telecommunicatio. In addition to that, LION ONE is 2.51 times more volatile than Singapore Telecommunications Limited. It trades about -0.03 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.04 per unit of volatility. If you would invest 165.00 in Singapore Telecommunications Limited on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Singapore Telecommunications Limited or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. Singapore Telecommunications L
Performance |
| Timeline |
| LION ONE METALS |
| Singapore Telecommunicatio |
LION ONE and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Singapore Telecommunicatio
The main advantage of trading using opposite LION ONE and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.| LION ONE vs. Public Storage | LION ONE vs. NTG Nordic Transport | LION ONE vs. Automatic Data Processing | LION ONE vs. Fidelity National Information |
| Singapore Telecommunicatio vs. LGI Homes | Singapore Telecommunicatio vs. DATAGROUP SE | Singapore Telecommunicatio vs. Science Applications International | Singapore Telecommunicatio vs. HomeToGo SE |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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