Correlation Between Singapore Telecommunicatio and Nexstar Media
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Nexstar Media 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 Nexstar Media 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 Nexstar Media Group, you can compare the effects of market volatilities on Singapore Telecommunicatio and Nexstar Media 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 Nexstar Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Nexstar Media.
Diversification Opportunities for Singapore Telecommunicatio and Nexstar Media
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Nexstar is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Nexstar Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Media Group 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 Nexstar Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Media Group has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Nexstar Media go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Nexstar Media
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.75 times more return on investment than Nexstar Media. However, Singapore Telecommunications Limited is 1.34 times less risky than Nexstar Media. It trades about 0.05 of its potential returns per unit of risk. Nexstar Media Group is currently generating about -0.01 per unit of risk. If you would invest 162.00 in Singapore Telecommunications Limited on October 25, 2024 and sell it today you would earn a total of 58.00 from holding Singapore Telecommunications Limited or generate 35.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Nexstar Media Group
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Nexstar Media Group |
Singapore Telecommunicatio and Nexstar Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Nexstar Media
The main advantage of trading using opposite Singapore Telecommunicatio and Nexstar Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Nexstar Media 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 Nexstar Media will offset losses from the drop in Nexstar Media's long position.| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. China Mobile Limited | Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc |
| Nexstar Media vs. Micron Technology | Nexstar Media vs. MUTUIONLINE | Nexstar Media vs. ZhongAn Online P | Nexstar Media vs. Entravision Communications |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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