Correlation Between Singapore Telecommunicatio and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Scandinavian Tobacco 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 Scandinavian Tobacco 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 Scandinavian Tobacco Group, you can compare the effects of market volatilities on Singapore Telecommunicatio and Scandinavian Tobacco 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 Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Scandinavian Tobacco.
Diversification Opportunities for Singapore Telecommunicatio and Scandinavian Tobacco
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Scandinavian is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco 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 Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Scandinavian Tobacco
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 1.11 times more return on investment than Scandinavian Tobacco. However, Singapore Telecommunicatio is 1.11 times more volatile than Scandinavian Tobacco Group. It trades about 0.13 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.0 per unit of risk. If you would invest 167.00 in Singapore Telecommunications Limited on September 2, 2024 and sell it today you would earn a total of 53.00 from holding Singapore Telecommunications Limited or generate 31.74% 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. Scandinavian Tobacco Group
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Scandinavian Tobacco |
Singapore Telecommunicatio and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Scandinavian Tobacco
The main advantage of trading using opposite Singapore Telecommunicatio and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| Singapore Telecommunicatio vs. LGI Homes | Singapore Telecommunicatio vs. DATAGROUP SE | Singapore Telecommunicatio vs. Science Applications International | Singapore Telecommunicatio vs. HomeToGo SE |
| Scandinavian Tobacco vs. Compugroup Medical SE | Scandinavian Tobacco vs. SAFETY MEDICAL PROD | Scandinavian Tobacco vs. IMAGIN MEDICAL INC | Scandinavian Tobacco vs. TYSON FOODS A |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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