Correlation Between Singapore Telecommunicatio and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and TROPHY GAMES 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 TROPHY GAMES 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 TROPHY GAMES DEV, you can compare the effects of market volatilities on Singapore Telecommunicatio and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and TROPHY GAMES.
Diversification Opportunities for Singapore Telecommunicatio and TROPHY GAMES
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singapore and TROPHY is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and TROPHY GAMES go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and TROPHY GAMES
Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 3.41 times less return on investment than TROPHY GAMES. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 2.98 times less risky than TROPHY GAMES. It trades about 0.05 of its potential returns per unit of risk. TROPHY GAMES DEV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 49.00 in TROPHY GAMES DEV on August 29, 2024 and sell it today you would earn a total of 43.00 from holding TROPHY GAMES DEV or generate 87.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. TROPHY GAMES DEV
Performance |
| Timeline |
| Singapore Telecommunicatio |
| TROPHY GAMES DEV |
Singapore Telecommunicatio and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and TROPHY GAMES
The main advantage of trading using opposite Singapore Telecommunicatio and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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