Correlation Between Singapore Telecommunicatio and Cal Maine
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Cal Maine 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 Cal Maine 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 Cal Maine Foods, you can compare the effects of market volatilities on Singapore Telecommunicatio and Cal Maine 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 Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Cal Maine.
Diversification Opportunities for Singapore Telecommunicatio and Cal Maine
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and Cal is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods 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 Cal Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Cal Maine go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Cal Maine
Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 26.56 times less return on investment than Cal Maine. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 2.49 times less risky than Cal Maine. It trades about 0.01 of its potential returns per unit of risk. Cal Maine Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10,055 in Cal Maine Foods on October 13, 2024 and sell it today you would earn a total of 295.00 from holding Cal Maine Foods or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Cal Maine Foods
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Cal Maine Foods |
Singapore Telecommunicatio and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Cal Maine
The main advantage of trading using opposite Singapore Telecommunicatio and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Cal Maine 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 Cal Maine will offset losses from the drop in Cal Maine's long position.The idea behind Singapore Telecommunications Limited and Cal Maine Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Cal Maine vs. Chunghwa Telecom Co | Cal Maine vs. Singapore Telecommunications Limited | Cal Maine vs. Perseus Mining Limited | Cal Maine vs. MAG SILVER |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |