Correlation Between Singapore Telecommunicatio and COMBA TELECOM
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and COMBA TELECOM 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 COMBA TELECOM 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 COMBA TELECOM SYST, you can compare the effects of market volatilities on Singapore Telecommunicatio and COMBA TELECOM 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 COMBA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and COMBA TELECOM.
Diversification Opportunities for Singapore Telecommunicatio and COMBA TELECOM
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Singapore and COMBA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST 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 COMBA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMBA TELECOM SYST has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and COMBA TELECOM go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and COMBA TELECOM
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 1.12 times more return on investment than COMBA TELECOM. However, Singapore Telecommunicatio is 1.12 times more volatile than COMBA TELECOM SYST. It trades about -0.01 of its potential returns per unit of risk. COMBA TELECOM SYST is currently generating about -0.21 per unit of risk. If you would invest 218.00 in Singapore Telecommunications Limited on August 25, 2024 and sell it today you would lose (2.00) from holding Singapore Telecommunications Limited or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Singapore Telecommunications L vs. COMBA TELECOM SYST
Performance |
| Timeline |
| Singapore Telecommunicatio |
| COMBA TELECOM SYST |
Singapore Telecommunicatio and COMBA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and COMBA TELECOM
The main advantage of trading using opposite Singapore Telecommunicatio and COMBA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, COMBA TELECOM 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 COMBA TELECOM will offset losses from the drop in COMBA TELECOM's long position.| Singapore Telecommunicatio vs. SHIN ETSU CHEMICAL | Singapore Telecommunicatio vs. Public Storage | Singapore Telecommunicatio vs. Eastman Chemical | Singapore Telecommunicatio vs. KINGBOARD CHEMICAL |
| COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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