Correlation Between Singapore Telecommunicatio and TMBThanachart Bank
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and TMBThanachart Bank 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 TMBThanachart Bank 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 TMBThanachart Bank Public, you can compare the effects of market volatilities on Singapore Telecommunicatio and TMBThanachart Bank 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 TMBThanachart Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and TMBThanachart Bank.
Diversification Opportunities for Singapore Telecommunicatio and TMBThanachart Bank
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singapore and TMBThanachart is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and TMBThanachart Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMBThanachart Bank Public 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 TMBThanachart Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMBThanachart Bank Public has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and TMBThanachart Bank go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and TMBThanachart Bank
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.9 times more return on investment than TMBThanachart Bank. However, Singapore Telecommunications Limited is 1.11 times less risky than TMBThanachart Bank. It trades about 0.05 of its potential returns per unit of risk. TMBThanachart Bank Public is currently generating about 0.04 per unit of risk. If you would invest 161.00 in Singapore Telecommunications Limited on October 7, 2024 and sell it today you would earn a total of 57.00 from holding Singapore Telecommunications Limited or generate 35.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Singapore Telecommunications L vs. TMBThanachart Bank Public
Performance |
Timeline |
Singapore Telecommunicatio |
TMBThanachart Bank Public |
Singapore Telecommunicatio and TMBThanachart Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Singapore Telecommunicatio and TMBThanachart Bank
The main advantage of trading using opposite Singapore Telecommunicatio and TMBThanachart Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, TMBThanachart Bank 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 TMBThanachart Bank will offset losses from the drop in TMBThanachart Bank's long position.Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. Nippon Telegraph and | Singapore Telecommunicatio vs. Superior Plus Corp | Singapore Telecommunicatio vs. NMI Holdings |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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