Correlation Between MSCI and Singapore Exchange
Can any of the company-specific risk be diversified away by investing in both MSCI 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 MSCI and Singapore Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI Inc and Singapore Exchange Limited, you can compare the effects of market volatilities on MSCI 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 MSCI with a short position of Singapore Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI and Singapore Exchange.
Diversification Opportunities for MSCI and Singapore Exchange
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MSCI and Singapore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MSCI Inc and Singapore Exchange Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Exchange and MSCI 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 MSCI Inc 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 MSCI i.e., MSCI and Singapore Exchange go up and down completely randomly.
Pair Corralation between MSCI and Singapore Exchange
Given the investment horizon of 90 days MSCI is expected to generate 80.82 times less return on investment than Singapore Exchange. But when comparing it to its historical volatility, MSCI Inc is 1.49 times less risky than Singapore Exchange. It trades about 0.0 of its potential returns per unit of risk. Singapore Exchange Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 892.00 in Singapore Exchange Limited on August 28, 2024 and sell it today you would earn a total of 49.00 from holding Singapore Exchange Limited or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSCI Inc vs. Singapore Exchange Limited
Performance |
| Timeline |
| MSCI Inc |
| Singapore Exchange |
MSCI and Singapore Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI and Singapore Exchange
The main advantage of trading using opposite MSCI and Singapore Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI 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.The idea behind MSCI Inc and Singapore Exchange 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 Exchange vs. Hong Kong Exchanges | Singapore Exchange vs. Singapore Exchange Ltd | Singapore Exchange vs. Deutsche Brse AG | Singapore Exchange vs. London Stock Exchange |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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