Correlation Between Singapore Telecommunicatio and Freenet AG
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By analyzing existing cross correlation between Singapore Telecommunications Limited and freenet AG, you can compare the effects of market volatilities on Singapore Telecommunicatio and Freenet AG 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 Freenet AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Freenet AG.
Diversification Opportunities for Singapore Telecommunicatio and Freenet AG
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Freenet is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and freenet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on freenet AG 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 Freenet AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of freenet AG has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Freenet AG go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Freenet AG
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 1.48 times more return on investment than Freenet AG. However, Singapore Telecommunicatio is 1.48 times more volatile than freenet AG. It trades about 0.08 of its potential returns per unit of risk. freenet AG is currently generating about 0.07 per unit of risk. If you would invest 153.00 in Singapore Telecommunications Limited on September 14, 2024 and sell it today you would earn a total of 62.00 from holding Singapore Telecommunications Limited or generate 40.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Singapore Telecommunications L vs. freenet AG
Performance |
| Timeline |
| Singapore Telecommunicatio |
| freenet AG |
Singapore Telecommunicatio and Freenet AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Freenet AG
The main advantage of trading using opposite Singapore Telecommunicatio and Freenet AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Freenet AG 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 Freenet AG will offset losses from the drop in Freenet AG's long position.The idea behind Singapore Telecommunications Limited and freenet AG 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.
| Freenet AG vs. Singapore Telecommunications Limited | Freenet AG vs. Ribbon Communications | Freenet AG vs. Universal Display | Freenet AG vs. Cogent Communications Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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