Correlation Between Singapore Telecommunicatio and Banpu PCL
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Banpu PCL 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 Banpu PCL 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 Banpu PCL, you can compare the effects of market volatilities on Singapore Telecommunicatio and Banpu PCL 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 Banpu PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Banpu PCL.
Diversification Opportunities for Singapore Telecommunicatio and Banpu PCL
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singapore and Banpu is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Banpu PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu PCL 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 Banpu PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu PCL has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Banpu PCL go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Banpu PCL
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.29 times more return on investment than Banpu PCL. However, Singapore Telecommunications Limited is 3.46 times less risky than Banpu PCL. It trades about 0.03 of its potential returns per unit of risk. Banpu PCL is currently generating about -0.07 per unit of risk. If you would invest 217.00 in Singapore Telecommunications Limited on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Singapore Telecommunications Limited or generate 1.38% 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. Banpu PCL
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Banpu PCL |
Singapore Telecommunicatio and Banpu PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Banpu PCL
The main advantage of trading using opposite Singapore Telecommunicatio and Banpu PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Banpu PCL 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 Banpu PCL will offset losses from the drop in Banpu PCL's long position.| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. China Mobile Limited | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Nippon Telegraph and |
| Banpu PCL vs. Cogent Communications Holdings | Banpu PCL vs. Charter Communications | Banpu PCL vs. LG Display Co | Banpu PCL vs. Singapore Telecommunications Limited |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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