Correlation Between Singapore Telecommunicatio and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Dairy Farm 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 Dairy Farm 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 Dairy Farm International, you can compare the effects of market volatilities on Singapore Telecommunicatio and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Dairy Farm.
Diversification Opportunities for Singapore Telecommunicatio and Dairy Farm
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Dairy is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Dairy Farm go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Dairy Farm
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.64 times more return on investment than Dairy Farm. However, Singapore Telecommunications Limited is 1.57 times less risky than Dairy Farm. It trades about 0.06 of its potential returns per unit of risk. Dairy Farm International is currently generating about 0.01 per unit of risk. If you would invest 157.00 in Singapore Telecommunications Limited on August 31, 2024 and sell it today you would earn a total of 55.00 from holding Singapore Telecommunications Limited or generate 35.03% 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. Dairy Farm International
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Dairy Farm International |
Singapore Telecommunicatio and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Dairy Farm
The main advantage of trading using opposite Singapore Telecommunicatio and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG | Singapore Telecommunicatio vs. Superior Plus Corp | Singapore Telecommunicatio vs. NMI Holdings |
| Dairy Farm vs. TESCO PLC LS 0633333 | Dairy Farm vs. Superior Plus Corp | Dairy Farm vs. NMI Holdings | Dairy Farm vs. Origin Agritech |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |