Correlation Between Singapore Telecommunicatio and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and PPG Industries 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 PPG Industries 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 PPG Industries, you can compare the effects of market volatilities on Singapore Telecommunicatio and PPG Industries 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 PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and PPG Industries.
Diversification Opportunities for Singapore Telecommunicatio and PPG Industries
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and PPG is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries 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 PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and PPG Industries go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and PPG Industries
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 1.15 times more return on investment than PPG Industries. However, Singapore Telecommunicatio is 1.15 times more volatile than PPG Industries. It trades about 0.05 of its potential returns per unit of risk. PPG Industries 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 55.00 from holding Singapore Telecommunications Limited or generate 33.95% 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. PPG Industries
Performance |
| Timeline |
| Singapore Telecommunicatio |
| PPG Industries |
Singapore Telecommunicatio and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and PPG Industries
The main advantage of trading using opposite Singapore Telecommunicatio and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, PPG Industries 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 PPG Industries will offset losses from the drop in PPG Industries' long position.| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. China Mobile Limited | Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc |
| PPG Industries vs. PEPTONIC MEDICAL | PPG Industries vs. LANDSEA GREEN MANAGEMENT | PPG Industries vs. Corporate Travel Management | PPG Industries vs. Japan Medical Dynamic |
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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