Correlation Between Singapore Telecommunicatio and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and GigaMedia 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 GigaMedia 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 GigaMedia, you can compare the effects of market volatilities on Singapore Telecommunicatio and GigaMedia 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 GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and GigaMedia.
Diversification Opportunities for Singapore Telecommunicatio and GigaMedia
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singapore and GigaMedia is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia 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 GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and GigaMedia go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and GigaMedia
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.44 times more return on investment than GigaMedia. However, Singapore Telecommunications Limited is 2.29 times less risky than GigaMedia. It trades about 0.26 of its potential returns per unit of risk. GigaMedia is currently generating about 0.02 per unit of risk. If you would invest 216.00 in Singapore Telecommunications Limited on November 3, 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. GigaMedia
Performance |
| Timeline |
| Singapore Telecommunicatio |
| GigaMedia |
Singapore Telecommunicatio and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and GigaMedia
The main advantage of trading using opposite Singapore Telecommunicatio and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.| Singapore Telecommunicatio vs. HAVERTY FURNITURE A | Singapore Telecommunicatio vs. bet at home AG | Singapore Telecommunicatio vs. Broadcom | Singapore Telecommunicatio vs. INVITATION HOMES DL |
| GigaMedia vs. Autohome ADR | GigaMedia vs. Semiconductor Manufacturing International | GigaMedia vs. The Home Depot | GigaMedia vs. DFS Furniture PLC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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