Correlation Between Singapore Telecommunicatio and Digerati Technologies
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Digerati Technologies 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 Digerati Technologies 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 Digerati Technologies, you can compare the effects of market volatilities on Singapore Telecommunicatio and Digerati Technologies 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 Digerati Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Digerati Technologies.
Diversification Opportunities for Singapore Telecommunicatio and Digerati Technologies
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Digerati is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Digerati Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digerati Technologies 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 Digerati Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digerati Technologies has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Digerati Technologies go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Digerati Technologies
Assuming the 90 days horizon Singapore Telecommunicatio is expected to generate 1.7 times less return on investment than Digerati Technologies. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 4.16 times less risky than Digerati Technologies. It trades about 0.23 of its potential returns per unit of risk. Digerati Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.90 in Digerati Technologies on November 27, 2024 and sell it today you would earn a total of 0.09 from holding Digerati Technologies or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Digerati Technologies
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Digerati Technologies |
Singapore Telecommunicatio and Digerati Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Digerati Technologies
The main advantage of trading using opposite Singapore Telecommunicatio and Digerati Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Digerati Technologies 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 Digerati Technologies will offset losses from the drop in Digerati Technologies' long position.| Singapore Telecommunicatio vs. Airtel Africa Plc | Singapore Telecommunicatio vs. KDDI Corp | Singapore Telecommunicatio vs. Amrica Mvil, SAB | Singapore Telecommunicatio vs. Turk Telekomunikasyon AS |
| Digerati Technologies vs. Proximus NV ADR | Digerati Technologies vs. Singapore Telecommunications Limited | Digerati Technologies vs. Telstra Limited | Digerati Technologies vs. MTN Group Ltd |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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