Correlation Between Straumann Holding and Singapore Exchange
Can any of the company-specific risk be diversified away by investing in both Straumann Holding 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 Straumann Holding and Singapore Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Straumann Holding AG and Singapore Exchange Ltd, you can compare the effects of market volatilities on Straumann Holding 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 Straumann Holding with a short position of Singapore Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Singapore Exchange.
Diversification Opportunities for Straumann Holding and Singapore Exchange
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Straumann and Singapore is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Singapore Exchange Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Exchange and Straumann Holding 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 Straumann Holding AG 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 Straumann Holding i.e., Straumann Holding and Singapore Exchange go up and down completely randomly.
Pair Corralation between Straumann Holding and Singapore Exchange
Assuming the 90 days horizon Straumann Holding AG is expected to generate 0.24 times more return on investment than Singapore Exchange. However, Straumann Holding AG is 4.12 times less risky than Singapore Exchange. It trades about -0.08 of its potential returns per unit of risk. Singapore Exchange Ltd is currently generating about -0.18 per unit of risk. If you would invest 14,097 in Straumann Holding AG on August 24, 2024 and sell it today you would lose (1,402) from holding Straumann Holding AG or give up 9.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Straumann Holding AG vs. Singapore Exchange Ltd
Performance |
| Timeline |
| Straumann Holding |
| Singapore Exchange |
Straumann Holding and Singapore Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Straumann Holding and Singapore Exchange
The main advantage of trading using opposite Straumann Holding and Singapore Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Straumann Holding 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.| Straumann Holding vs. Sysmex Corp | Straumann Holding vs. Straumann Holding AG | Straumann Holding vs. Coloplast AS | Straumann Holding vs. Essilor International SA |
| Singapore Exchange vs. London Stock Exchange | Singapore Exchange vs. Hong Kong Exchanges | Singapore Exchange vs. Morningstar | Singapore Exchange vs. FactSet Research Systems |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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