Correlation Between Singapore Technologies and Thales SA
Can any of the company-specific risk be diversified away by investing in both Singapore Technologies and Thales SA 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 Technologies and Thales SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Technologies Engineering and Thales SA, you can compare the effects of market volatilities on Singapore Technologies and Thales SA 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 Technologies with a short position of Thales SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Technologies and Thales SA.
Diversification Opportunities for Singapore Technologies and Thales SA
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singapore and Thales is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Technologies Enginee and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA and Singapore Technologies 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 Technologies Engineering are associated (or correlated) with Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of Singapore Technologies i.e., Singapore Technologies and Thales SA go up and down completely randomly.
Pair Corralation between Singapore Technologies and Thales SA
Assuming the 90 days horizon Singapore Technologies Engineering is expected to generate 1.62 times more return on investment than Thales SA. However, Singapore Technologies is 1.62 times more volatile than Thales SA. It trades about 0.06 of its potential returns per unit of risk. Thales SA is currently generating about -0.38 per unit of risk. If you would invest 324.00 in Singapore Technologies Engineering on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Singapore Technologies Engineering or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Technologies Enginee vs. Thales SA
Performance |
| Timeline |
| Singapore Technologies |
| Thales SA |
Singapore Technologies and Thales SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Technologies and Thales SA
The main advantage of trading using opposite Singapore Technologies and Thales SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Technologies position performs unexpectedly, Thales SA 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 Thales SA will offset losses from the drop in Thales SA's long position.| Singapore Technologies vs. Firan Technology Group | Singapore Technologies vs. 808 Renewable Energy | Singapore Technologies vs. Park Electrochemical | Singapore Technologies vs. Innovative Solutions and |
| Thales SA vs. Firan Technology Group | Thales SA vs. 808 Renewable Energy | Thales SA vs. Park Electrochemical | Thales SA vs. Innovative Solutions and |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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