Correlation Between SOLSTAD OFFSHORE and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and Singapore Telecommunicatio 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 SOLSTAD OFFSHORE and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOLSTAD OFFSHORE NK and Singapore Telecommunications Limited, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and Singapore Telecommunicatio 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 SOLSTAD OFFSHORE with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and Singapore Telecommunicatio.
Diversification Opportunities for SOLSTAD OFFSHORE and Singapore Telecommunicatio
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOLSTAD and Singapore is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE NK are associated (or correlated) with Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and Singapore Telecommunicatio
Assuming the 90 days horizon SOLSTAD OFFSHORE is expected to generate 5.35 times less return on investment than Singapore Telecommunicatio. In addition to that, SOLSTAD OFFSHORE is 1.96 times more volatile than Singapore Telecommunications Limited. It trades about 0.01 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.14 per unit of volatility. If you would invest 162.00 in Singapore Telecommunications Limited on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Singapore Telecommunications Limited or generate 35.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. Singapore Telecommunications L
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| Singapore Telecommunicatio |
SOLSTAD OFFSHORE and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and Singapore Telecommunicatio
The main advantage of trading using opposite SOLSTAD OFFSHORE and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, Singapore Telecommunicatio 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 Singapore Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's long position.| SOLSTAD OFFSHORE vs. Clarkson PLC | SOLSTAD OFFSHORE vs. Wilh Wilhelmsen Holding | SOLSTAD OFFSHORE vs. Superior Plus Corp | SOLSTAD OFFSHORE vs. NMI Holdings |
| Singapore Telecommunicatio vs. Monster Beverage Corp | Singapore Telecommunicatio vs. United Breweries Co | Singapore Telecommunicatio vs. ARISTOCRAT LEISURE | Singapore Telecommunicatio vs. ePlay Digital |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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