Correlation Between Singapore Telecommunicatio and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on Singapore Telecommunicatio and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and SENECA FOODS-A.
Diversification Opportunities for Singapore Telecommunicatio and SENECA FOODS-A
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Singapore and SENECA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and SENECA FOODS-A
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.76 times more return on investment than SENECA FOODS-A. However, Singapore Telecommunications Limited is 1.32 times less risky than SENECA FOODS-A. It trades about 0.22 of its potential returns per unit of risk. SENECA FOODS A is currently generating about -0.26 per unit of risk. If you would invest 219.00 in Singapore Telecommunications Limited on November 5, 2024 and sell it today you would earn a total of 13.00 from holding Singapore Telecommunications Limited or generate 5.94% 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. SENECA FOODS A
Performance |
| Timeline |
| Singapore Telecommunicatio |
| SENECA FOODS A |
Singapore Telecommunicatio and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and SENECA FOODS-A
The main advantage of trading using opposite Singapore Telecommunicatio and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. China Mobile Limited | Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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