Correlation Between Singapore Telecommunicatio and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Telenor ASA 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 Telenor ASA 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 Telenor ASA ADR, you can compare the effects of market volatilities on Singapore Telecommunicatio and Telenor ASA 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 Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Telenor ASA.
Diversification Opportunities for Singapore Telecommunicatio and Telenor ASA
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singapore and Telenor is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications P and Telenor ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA ADR 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 Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA ADR has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Telenor ASA go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Telenor ASA
Assuming the 90 days horizon Singapore Telecommunications PK is expected to under-perform the Telenor ASA. But the pink sheet apears to be less risky and, when comparing its historical volatility, Singapore Telecommunications PK is 1.21 times less risky than Telenor ASA. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Telenor ASA ADR is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,189 in Telenor ASA ADR on August 29, 2024 and sell it today you would lose (1.00) from holding Telenor ASA ADR or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications P vs. Telenor ASA ADR
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Telenor ASA ADR |
Singapore Telecommunicatio and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Telenor ASA
The main advantage of trading using opposite Singapore Telecommunicatio and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA's long position.| Singapore Telecommunicatio vs. KDDI Corp | Singapore Telecommunicatio vs. Amrica Mvil, SAB | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. FingerMotion |
| Telenor ASA vs. HUMANA INC | Telenor ASA vs. SCOR PK | Telenor ASA vs. Aquagold International | Telenor ASA vs. Barloworld Ltd ADR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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