Correlation Between Singapore Telecommunicatio and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Agnico Eagle 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 Agnico Eagle 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 Agnico Eagle Mines, you can compare the effects of market volatilities on Singapore Telecommunicatio and Agnico Eagle 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 Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Agnico Eagle.
Diversification Opportunities for Singapore Telecommunicatio and Agnico Eagle
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and Agnico is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines 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 Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Agnico Eagle go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Agnico Eagle
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.72 times more return on investment than Agnico Eagle. However, Singapore Telecommunications Limited is 1.38 times less risky than Agnico Eagle. It trades about 0.03 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about -0.07 per unit of risk. If you would invest 214.00 in Singapore Telecommunications Limited on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Singapore Telecommunications Limited or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Agnico Eagle Mines
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Agnico Eagle Mines |
Singapore Telecommunicatio and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Agnico Eagle
The main advantage of trading using opposite Singapore Telecommunicatio and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG |
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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