Correlation Between Singapore Telecommunicatio and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and BANK MANDIRI 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 BANK MANDIRI 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 BANK MANDIRI, you can compare the effects of market volatilities on Singapore Telecommunicatio and BANK MANDIRI 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 BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and BANK MANDIRI.
Diversification Opportunities for Singapore Telecommunicatio and BANK MANDIRI
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Singapore and BANK is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI 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 BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and BANK MANDIRI go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and BANK MANDIRI
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.75 times more return on investment than BANK MANDIRI. However, Singapore Telecommunications Limited is 1.34 times less risky than BANK MANDIRI. It trades about 0.13 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.04 per unit of risk. If you would invest 167.00 in Singapore Telecommunications Limited on September 2, 2024 and sell it today you would earn a total of 53.00 from holding Singapore Telecommunications Limited or generate 31.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. BANK MANDIRI
Performance |
| Timeline |
| Singapore Telecommunicatio |
| BANK MANDIRI |
Singapore Telecommunicatio and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and BANK MANDIRI
The main advantage of trading using opposite Singapore Telecommunicatio and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, BANK MANDIRI 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 BANK MANDIRI will offset losses from the drop in BANK MANDIRI's long position.| Singapore Telecommunicatio vs. LGI Homes | Singapore Telecommunicatio vs. DATAGROUP SE | Singapore Telecommunicatio vs. Science Applications International | Singapore Telecommunicatio vs. HomeToGo SE |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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