Correlation Between Singapore Telecommunicatio and Tele2 AB
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Tele2 AB 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 Tele2 AB 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 Tele2 AB, you can compare the effects of market volatilities on Singapore Telecommunicatio and Tele2 AB 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 Tele2 AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Tele2 AB.
Diversification Opportunities for Singapore Telecommunicatio and Tele2 AB
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and Tele2 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Tele2 AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tele2 AB 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 Tele2 AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tele2 AB has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Tele2 AB go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Tele2 AB
Assuming the 90 days horizon Singapore Telecommunications Limited is expected to generate 2.61 times more return on investment than Tele2 AB. However, Singapore Telecommunicatio is 2.61 times more volatile than Tele2 AB. It trades about 0.04 of its potential returns per unit of risk. Tele2 AB is currently generating about 0.02 per unit of risk. If you would invest 193.00 in Singapore Telecommunications Limited on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Singapore Telecommunications Limited or generate 15.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 69.31% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Tele2 AB
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Tele2 AB |
Singapore Telecommunicatio and Tele2 AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Tele2 AB
The main advantage of trading using opposite Singapore Telecommunicatio and Tele2 AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Tele2 AB 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 Tele2 AB will offset losses from the drop in Tele2 AB'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 |
| Tele2 AB vs. Proximus NV ADR | Tele2 AB vs. Telstra Limited | Tele2 AB vs. Singapore Telecommunications Limited | Tele2 AB vs. Vodafone Group PLC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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