Correlation Between Singapore Telecommunicatio and Magna International
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Magna International 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 Magna International 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 Magna International, you can compare the effects of market volatilities on Singapore Telecommunicatio and Magna International 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 Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Magna International.
Diversification Opportunities for Singapore Telecommunicatio and Magna International
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Singapore and Magna is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Magna International go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Magna International
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.79 times more return on investment than Magna International. However, Singapore Telecommunications Limited is 1.27 times less risky than Magna International. It trades about 0.02 of its potential returns per unit of risk. Magna International is currently generating about -0.15 per unit of risk. If you would invest 234.00 in Singapore Telecommunications Limited on December 11, 2024 and sell it today you would earn a total of 1.00 from holding Singapore Telecommunications Limited or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Magna International
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Magna International |
Singapore Telecommunicatio and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Magna International
The main advantage of trading using opposite Singapore Telecommunicatio and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| Singapore Telecommunicatio vs. CARSALESCOM | Singapore Telecommunicatio vs. TAL Education Group | Singapore Telecommunicatio vs. Salesforce | Singapore Telecommunicatio vs. STRAYER EDUCATION |
| Magna International vs. East Africa Metals | Magna International vs. SBA Communications Corp | Magna International vs. GRIFFIN MINING LTD | Magna International vs. ADRIATIC METALS LS 013355 |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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