Correlation Between Singapore Telecommunicatio and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement SA, you can compare the effects of market volatilities on Singapore Telecommunicatio and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Veolia Environnement.
Diversification Opportunities for Singapore Telecommunicatio and Veolia Environnement
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Veolia is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Veolia Environnement go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Veolia Environnement
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.89 times more return on investment than Veolia Environnement. However, Singapore Telecommunications Limited is 1.13 times less risky than Veolia Environnement. It trades about 0.19 of its potential returns per unit of risk. Veolia Environnement SA is currently generating about -0.02 per unit of risk. If you would invest 214.00 in Singapore Telecommunications Limited on November 8, 2024 and sell it today you would earn a total of 11.00 from holding Singapore Telecommunications Limited or generate 5.14% 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. Veolia Environnement SA
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Veolia Environnement |
Singapore Telecommunicatio and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Veolia Environnement
The main advantage of trading using opposite Singapore Telecommunicatio and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| Singapore Telecommunicatio vs. Columbia Sportswear | Singapore Telecommunicatio vs. American Homes 4 | Singapore Telecommunicatio vs. ADDUS HOMECARE | Singapore Telecommunicatio vs. Fukuyama Transporting Co |
| Veolia Environnement vs. APPLIED MATERIALS | Veolia Environnement vs. NEWELL RUBBERMAID | Veolia Environnement vs. Plastic Omnium | Veolia Environnement vs. SWISS WATER DECAFFCOFFEE |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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