Correlation Between Singapore Telecommunicatio and MTN Group
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and MTN Group 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 MTN Group 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 MTN Group Ltd, you can compare the effects of market volatilities on Singapore Telecommunicatio and MTN Group 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 MTN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and MTN Group.
Diversification Opportunities for Singapore Telecommunicatio and MTN Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Singapore and MTN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and MTN Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group 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 MTN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTN Group has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and MTN Group go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and MTN Group
Assuming the 90 days horizon Singapore Telecommunications Limited is expected to generate 0.57 times more return on investment than MTN Group. However, Singapore Telecommunications Limited is 1.76 times less risky than MTN Group. It trades about -0.33 of its potential returns per unit of risk. MTN Group Ltd is currently generating about -0.31 per unit of risk. If you would invest 242.00 in Singapore Telecommunications Limited on August 25, 2024 and sell it today you would lose (19.00) from holding Singapore Telecommunications Limited or give up 7.85% 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. MTN Group Ltd
Performance |
| Timeline |
| Singapore Telecommunicatio |
| MTN Group |
Singapore Telecommunicatio and MTN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and MTN Group
The main advantage of trading using opposite Singapore Telecommunicatio and MTN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, MTN Group 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 MTN Group will offset losses from the drop in MTN Group's 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 |
| MTN Group vs. XL Axiata Tbk | MTN Group vs. Telenor ASA ADR | MTN Group vs. KT Corporation | MTN Group vs. Vodacom 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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