Correlation Between Singapore Telecommunicatio and China Resources
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and China Resources 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 China Resources 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 China Resources Beer, you can compare the effects of market volatilities on Singapore Telecommunicatio and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and China Resources.
Diversification Opportunities for Singapore Telecommunicatio and China Resources
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and China is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and China Resources go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and China Resources
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.43 times more return on investment than China Resources. However, Singapore Telecommunications Limited is 2.33 times less risky than China Resources. It trades about 0.29 of its potential returns per unit of risk. China Resources Beer is currently generating about 0.0 per unit of risk. If you would invest 216.00 in Singapore Telecommunications Limited on November 2, 2024 and sell it today you would earn a total of 16.00 from holding Singapore Telecommunications Limited or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. China Resources Beer
Performance |
| Timeline |
| Singapore Telecommunicatio |
| China Resources Beer |
Singapore Telecommunicatio and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and China Resources
The main advantage of trading using opposite Singapore Telecommunicatio and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Singapore Telecommunicatio vs. TreeHouse Foods | Singapore Telecommunicatio vs. Global Ship Lease | Singapore Telecommunicatio vs. FIRST SHIP LEASE | Singapore Telecommunicatio vs. Performance Food Group |
| China Resources vs. NEWELL RUBBERMAID | China Resources vs. Fukuyama Transporting Co | China Resources vs. SANOK RUBBER ZY | China Resources vs. Eagle Materials |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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