Correlation Between Singapore Telecommunicatio and Liberty Latin
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Liberty Latin 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 Liberty Latin 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 Liberty Latin America, you can compare the effects of market volatilities on Singapore Telecommunicatio and Liberty Latin 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 Liberty Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Liberty Latin.
Diversification Opportunities for Singapore Telecommunicatio and Liberty Latin
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and Liberty is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Liberty Latin America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Latin America 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 Liberty Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Latin America has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Liberty Latin go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Liberty Latin
Assuming the 90 days horizon Singapore Telecommunications Limited is expected to generate 0.21 times more return on investment than Liberty Latin. However, Singapore Telecommunications Limited is 4.73 times less risky than Liberty Latin. It trades about -0.32 of its potential returns per unit of risk. Liberty Latin America is currently generating about -0.26 per unit of risk. If you would invest 241.00 in Singapore Telecommunications Limited on August 27, 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. Liberty Latin America
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Liberty Latin America |
Singapore Telecommunicatio and Liberty Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Liberty Latin
The main advantage of trading using opposite Singapore Telecommunicatio and Liberty Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Liberty Latin 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 Liberty Latin will offset losses from the drop in Liberty Latin's long position.| Singapore Telecommunicatio vs. Vodafone Group PLC | Singapore Telecommunicatio vs. KDDI Corp | Singapore Telecommunicatio vs. Amrica Mvil, SAB | Singapore Telecommunicatio vs. ATT Inc |
| Liberty Latin vs. Liberty Broadband Srs | Liberty Latin vs. Ribbon Communications | Liberty Latin vs. Liberty Broadband Srs | Liberty Latin vs. Shenandoah Telecommunications Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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