Correlation Between Singapore Telecommunicatio and Airtel Africa
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Airtel Africa 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 Airtel Africa 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 Airtel Africa Plc, you can compare the effects of market volatilities on Singapore Telecommunicatio and Airtel Africa 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 Airtel Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Airtel Africa.
Diversification Opportunities for Singapore Telecommunicatio and Airtel Africa
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Singapore and Airtel is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Airtel Africa Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtel Africa Plc 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 Airtel Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtel Africa Plc has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Airtel Africa go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Airtel Africa
Assuming the 90 days horizon Singapore Telecommunications Limited is expected to generate 0.36 times more return on investment than Airtel Africa. However, Singapore Telecommunications Limited is 2.75 times less risky than Airtel Africa. It trades about -0.31 of its potential returns per unit of risk. Airtel Africa Plc is currently generating about -0.19 per unit of risk. If you would invest 241.00 in Singapore Telecommunications Limited on August 31, 2024 and sell it today you would lose (18.00) from holding Singapore Telecommunications Limited or give up 7.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Airtel Africa Plc
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Airtel Africa Plc |
Singapore Telecommunicatio and Airtel Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Airtel Africa
The main advantage of trading using opposite Singapore Telecommunicatio and Airtel Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Airtel Africa 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 Airtel Africa will offset losses from the drop in Airtel Africa's long position.| Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Comcast Corp | Singapore Telecommunicatio vs. KDDI Corp |
| Airtel Africa vs. Verizon Communications | Airtel Africa vs. ATT Inc | Airtel Africa vs. Comcast Corp | Airtel Africa vs. KDDI Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |