Correlation Between Singapore Telecommunicatio and Alliance Data
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Alliance Data 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 Alliance Data 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 Alliance Data Systems, you can compare the effects of market volatilities on Singapore Telecommunicatio and Alliance Data 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 Alliance Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Alliance Data.
Diversification Opportunities for Singapore Telecommunicatio and Alliance Data
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Singapore and Alliance is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Alliance Data Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Data Systems 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 Alliance Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Data Systems has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Alliance Data go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Alliance Data
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.62 times more return on investment than Alliance Data. However, Singapore Telecommunications Limited is 1.6 times less risky than Alliance Data. It trades about 0.15 of its potential returns per unit of risk. Alliance Data Systems is currently generating about 0.03 per unit of risk. If you would invest 219.00 in Singapore Telecommunications Limited on November 7, 2024 and sell it today you would earn a total of 9.00 from holding Singapore Telecommunications Limited or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Alliance Data Systems
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Alliance Data Systems |
Singapore Telecommunicatio and Alliance Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Alliance Data
The main advantage of trading using opposite Singapore Telecommunicatio and Alliance Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Alliance Data 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 Alliance Data will offset losses from the drop in Alliance Data's long position.| Singapore Telecommunicatio vs. Aristocrat Leisure Limited | Singapore Telecommunicatio vs. CANON MARKETING JP | Singapore Telecommunicatio vs. CARSALESCOM | Singapore Telecommunicatio vs. Salesforce |
| Alliance Data vs. ATOSS SOFTWARE | Alliance Data vs. Beta Systems Software | Alliance Data vs. FORMPIPE SOFTWARE AB | Alliance Data vs. BioNTech SE |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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