Correlation Between Singapore Telecommunicatio and Koninklijke KPN
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Koninklijke KPN 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 Singapore Telecommunicatio and Koninklijke KPN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Telecommunications PK and Koninklijke KPN NV, you can compare the effects of market volatilities on Singapore Telecommunicatio and Koninklijke KPN 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 Singapore Telecommunicatio with a short position of Koninklijke KPN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Koninklijke KPN.
Diversification Opportunities for Singapore Telecommunicatio and Koninklijke KPN
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Koninklijke is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications P and Koninklijke KPN NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke KPN NV and Singapore Telecommunicatio 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 Singapore Telecommunications PK are associated (or correlated) with Koninklijke KPN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke KPN NV has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Koninklijke KPN go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Koninklijke KPN
If you would invest 1,807 in Singapore Telecommunications PK on August 29, 2024 and sell it today you would earn a total of 426.00 from holding Singapore Telecommunications PK or generate 23.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.25% |
| Values | Daily Returns |
Singapore Telecommunications P vs. Koninklijke KPN NV
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Koninklijke KPN NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Singapore Telecommunicatio and Koninklijke KPN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Koninklijke KPN
The main advantage of trading using opposite Singapore Telecommunicatio and Koninklijke KPN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Koninklijke KPN 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 Koninklijke KPN will offset losses from the drop in Koninklijke KPN's long position.| Singapore Telecommunicatio vs. KDDI Corp | Singapore Telecommunicatio vs. Amrica Mvil, SAB | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. FingerMotion |
| Koninklijke KPN vs. Pegasus Tel | Koninklijke KPN vs. SwissCom AG | Koninklijke KPN vs. Hellenic Telecommunications Org | Koninklijke KPN vs. KonaTel |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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