Correlation Between XL Axiata and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both XL Axiata 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 XL Axiata and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XL Axiata Tbk and Singapore Telecommunications Limited, you can compare the effects of market volatilities on XL Axiata 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 XL Axiata with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of XL Axiata and Singapore Telecommunicatio.
Diversification Opportunities for XL Axiata and Singapore Telecommunicatio
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PTXKY and Singapore is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding XL Axiata Tbk and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and XL Axiata 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 XL Axiata Tbk 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 XL Axiata i.e., XL Axiata and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between XL Axiata and Singapore Telecommunicatio
Assuming the 90 days horizon XL Axiata is expected to generate 2.65 times less return on investment than Singapore Telecommunicatio. But when comparing it to its historical volatility, XL Axiata Tbk is 1.52 times less risky than Singapore Telecommunicatio. It trades about 0.02 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 192.00 in Singapore Telecommunications Limited on August 30, 2024 and sell it today you would earn a total of 31.00 from holding Singapore Telecommunications Limited or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.66% |
| Values | Daily Returns |
XL Axiata Tbk vs. Singapore Telecommunications L
Performance |
| Timeline |
| XL Axiata Tbk |
| Singapore Telecommunicatio |
XL Axiata and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XL Axiata and Singapore Telecommunicatio
The main advantage of trading using opposite XL Axiata and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XL Axiata 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.| XL Axiata vs. MTN Group Ltd | XL Axiata vs. Vodacom Group Ltd | XL Axiata vs. Telenor ASA ADR | XL Axiata vs. KT Corporation |
| Singapore Telecommunicatio vs. Airtel Africa Plc | Singapore Telecommunicatio vs. KDDI Corp | Singapore Telecommunicatio vs. Amrica Mvil, SAB | Singapore Telecommunicatio vs. Turk Telekomunikasyon AS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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