Correlation Between Singapore Telecommunicatio and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and GAMESTOP 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 GAMESTOP 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 GAMESTOP, you can compare the effects of market volatilities on Singapore Telecommunicatio and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and GAMESTOP.
Diversification Opportunities for Singapore Telecommunicatio and GAMESTOP
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and GAMESTOP is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and GAMESTOP go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and GAMESTOP
Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 5.03 times less return on investment than GAMESTOP. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 5.59 times less risky than GAMESTOP. It trades about 0.08 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,200 in GAMESTOP on August 25, 2024 and sell it today you would earn a total of 1,435 from holding GAMESTOP or generate 119.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Singapore Telecommunications L vs. GAMESTOP
Performance |
| Timeline |
| Singapore Telecommunicatio |
| GAMESTOP |
Singapore Telecommunicatio and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and GAMESTOP
The main advantage of trading using opposite Singapore Telecommunicatio and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| Singapore Telecommunicatio vs. SHIN ETSU CHEMICAL | Singapore Telecommunicatio vs. Public Storage | Singapore Telecommunicatio vs. Eastman Chemical | Singapore Telecommunicatio vs. KINGBOARD CHEMICAL |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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