Correlation Between SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12
Can any of the company-specific risk be diversified away by investing in both SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12 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 EXUNSPADR/15 and LONDON STEXUNSPADRS12 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE EXUNSPADR15 and LONDON STEXUNSPADRS12, you can compare the effects of market volatilities on SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12 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 EXUNSPADR/15 with a short position of LONDON STEXUNSPADRS12. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12.
Diversification Opportunities for SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SINGAPORE and LONDON is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE EXUNSPADR15 and LONDON STEXUNSPADRS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LONDON STEXUNSPADRS12 and SINGAPORE EXUNSPADR/15 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 EXUNSPADR15 are associated (or correlated) with LONDON STEXUNSPADRS12. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LONDON STEXUNSPADRS12 has no effect on the direction of SINGAPORE EXUNSPADR/15 i.e., SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12 go up and down completely randomly.
Pair Corralation between SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12
Assuming the 90 days trading horizon SINGAPORE EXUNSPADR15 is expected to generate 1.02 times more return on investment than LONDON STEXUNSPADRS12. However, SINGAPORE EXUNSPADR/15 is 1.02 times more volatile than LONDON STEXUNSPADRS12. It trades about 0.1 of its potential returns per unit of risk. LONDON STEXUNSPADRS12 is currently generating about 0.07 per unit of risk. If you would invest 834.00 in SINGAPORE EXUNSPADR15 on November 2, 2024 and sell it today you would earn a total of 806.00 from holding SINGAPORE EXUNSPADR15 or generate 96.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE EXUNSPADR15 vs. LONDON STEXUNSPADRS12
Performance |
| Timeline |
| SINGAPORE EXUNSPADR/15 |
| LONDON STEXUNSPADRS12 |
SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12
The main advantage of trading using opposite SINGAPORE EXUNSPADR/15 and LONDON STEXUNSPADRS12 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE EXUNSPADR/15 position performs unexpectedly, LONDON STEXUNSPADRS12 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 LONDON STEXUNSPADRS12 will offset losses from the drop in LONDON STEXUNSPADRS12's long position.| SINGAPORE EXUNSPADR/15 vs. LONDON STEXUNSPADRS12 | SINGAPORE EXUNSPADR/15 vs. Nasdaq Inc | SINGAPORE EXUNSPADR/15 vs. Cboe Global Markets | SINGAPORE EXUNSPADR/15 vs. ASX LTD UNSPONSADR |
| LONDON STEXUNSPADRS12 vs. CVR Medical Corp | LONDON STEXUNSPADRS12 vs. Apollo Medical Holdings | LONDON STEXUNSPADRS12 vs. RYU Apparel | LONDON STEXUNSPADRS12 vs. BROADSTNET LEADL 00025 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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