Correlation Between Singapore Telecommunicatio and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Hyatt Hotels 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 Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Telecommunications Limited and Hyatt Hotels, you can compare the effects of market volatilities on Singapore Telecommunicatio and Hyatt Hotels 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 Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Hyatt Hotels.
Diversification Opportunities for Singapore Telecommunicatio and Hyatt Hotels
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Hyatt is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels 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 Limited are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Hyatt Hotels
Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 3.3 times less return on investment than Hyatt Hotels. In addition to that, Singapore Telecommunicatio is 1.15 times more volatile than Hyatt Hotels. It trades about 0.08 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.29 per unit of volatility. If you would invest 13,316 in Hyatt Hotels on September 3, 2024 and sell it today you would earn a total of 1,409 from holding Hyatt Hotels or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Hyatt Hotels
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Hyatt Hotels |
Singapore Telecommunicatio and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Hyatt Hotels
The main advantage of trading using opposite Singapore Telecommunicatio and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Hyatt Hotels 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. China Mobile Limited | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Nippon Telegraph and |
| Hyatt Hotels vs. Dairy Farm International | Hyatt Hotels vs. Eidesvik Offshore ASA | Hyatt Hotels vs. Nufarm Limited | Hyatt Hotels vs. BW OFFSHORE LTD |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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