Correlation Between Singapore Telecommunicatio and United Overseas
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and United Overseas 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 United Overseas 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 United Overseas Bank, you can compare the effects of market volatilities on Singapore Telecommunicatio and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and United Overseas.
Diversification Opportunities for Singapore Telecommunicatio and United Overseas
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and United is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications P and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas Bank 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and United Overseas go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and United Overseas
Assuming the 90 days horizon Singapore Telecommunications PK is expected to under-perform the United Overseas. But the pink sheet apears to be less risky and, when comparing its historical volatility, Singapore Telecommunications PK is 1.15 times less risky than United Overseas. The pink sheet trades about -0.16 of its potential returns per unit of risk. The United Overseas Bank is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,902 in United Overseas Bank on August 30, 2024 and sell it today you would earn a total of 534.00 from holding United Overseas Bank or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications P vs. United Overseas Bank
Performance |
| Timeline |
| Singapore Telecommunicatio |
| United Overseas Bank |
Singapore Telecommunicatio and United Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and United Overseas
The main advantage of trading using opposite Singapore Telecommunicatio and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' long position.| Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Pharvaris BV | Singapore Telecommunicatio vs. Direxion Daily FTSE |
| United Overseas vs. KBC Groep NV | United Overseas vs. DBS Group Holdings | United Overseas vs. HomeStreet | United Overseas vs. Bank of Hawaii |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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