Correlation Between Singapore Telecommunicatio and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Singapore Airlines 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 Singapore Airlines 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 Singapore Airlines Limited, you can compare the effects of market volatilities on Singapore Telecommunicatio and Singapore Airlines 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 Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Singapore Airlines.
Diversification Opportunities for Singapore Telecommunicatio and Singapore Airlines
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singapore and Singapore is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines 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 Singapore Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Airlines has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Singapore Airlines go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Singapore Airlines
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 1.13 times more return on investment than Singapore Airlines. However, Singapore Telecommunicatio is 1.13 times more volatile than Singapore Airlines Limited. It trades about 0.05 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.05 per unit of risk. If you would invest 161.00 in Singapore Telecommunications Limited on October 17, 2024 and sell it today you would earn a total of 59.00 from holding Singapore Telecommunications Limited or generate 36.65% 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. Singapore Airlines Limited
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Singapore Airlines |
Singapore Telecommunicatio and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Singapore Airlines
The main advantage of trading using opposite Singapore Telecommunicatio and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Singapore Airlines 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 Singapore Airlines will offset losses from the drop in Singapore Airlines' long position.| Singapore Telecommunicatio vs. STEEL DYNAMICS | Singapore Telecommunicatio vs. VULCAN MATERIALS | Singapore Telecommunicatio vs. Vulcan Materials | Singapore Telecommunicatio vs. Heidelberg Materials AG |
| Singapore Airlines vs. CRISPR Therapeutics AG | Singapore Airlines vs. InterContinental Hotels Group | Singapore Airlines vs. Hyatt Hotels | Singapore Airlines 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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