Correlation Between Singapore Telecommunicatio and Silver Mines
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Silver Mines 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 Silver Mines 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 Silver Mines Limited, you can compare the effects of market volatilities on Singapore Telecommunicatio and Silver Mines 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 Silver Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Silver Mines.
Diversification Opportunities for Singapore Telecommunicatio and Silver Mines
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Silver is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines Limited 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 Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Silver Mines go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Silver Mines
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to under-perform the Silver Mines. But the stock apears to be less risky and, when comparing its historical volatility, Singapore Telecommunications Limited is 5.77 times less risky than Silver Mines. The stock trades about 0.0 of its potential returns per unit of risk. The Silver Mines Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.70 in Silver Mines Limited on September 26, 2024 and sell it today you would earn a total of 0.26 from holding Silver Mines Limited or generate 5.53% 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. Silver Mines Limited
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Silver Mines Limited |
Singapore Telecommunicatio and Silver Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Silver Mines
The main advantage of trading using opposite Singapore Telecommunicatio and Silver Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Silver Mines 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 Silver Mines will offset losses from the drop in Silver Mines' long position.| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG |
| Silver Mines vs. Entravision Communications | Silver Mines vs. HEMISPHERE EGY | Silver Mines vs. Singapore Telecommunications Limited | Silver Mines vs. PennantPark Investment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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