Correlation Between Singapore Telecommunicatio and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Aegean Airlines 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 Aegean Airlines 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 Aegean Airlines SA, you can compare the effects of market volatilities on Singapore Telecommunicatio and Aegean Airlines 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 Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Aegean Airlines.
Diversification Opportunities for Singapore Telecommunicatio and Aegean Airlines
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Aegean is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA 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 Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Aegean Airlines go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Aegean Airlines
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.98 times more return on investment than Aegean Airlines. However, Singapore Telecommunications Limited is 1.02 times less risky than Aegean Airlines. It trades about 0.12 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.08 per unit of risk. If you would invest 168.00 in Singapore Telecommunications Limited on August 28, 2024 and sell it today you would earn a total of 47.00 from holding Singapore Telecommunications Limited or generate 27.98% 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. Aegean Airlines SA
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Aegean Airlines SA |
Singapore Telecommunicatio and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Aegean Airlines
The main advantage of trading using opposite Singapore Telecommunicatio and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG |
| Aegean Airlines vs. Zoom Video Communications | Aegean Airlines vs. Singapore Telecommunications Limited | Aegean Airlines vs. Ribbon Communications | Aegean Airlines vs. AWILCO DRILLING PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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