Correlation Between Telenor ASA and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Telenor ASA 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 Telenor ASA and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA ADR and Singapore Telecommunications PK, you can compare the effects of market volatilities on Telenor ASA 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 Telenor ASA with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Singapore Telecommunicatio.
Diversification Opportunities for Telenor ASA and Singapore Telecommunicatio
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telenor and Singapore is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA ADR and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Telenor ASA 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 Telenor ASA ADR 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 Telenor ASA i.e., Telenor ASA and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Telenor ASA and Singapore Telecommunicatio
Assuming the 90 days horizon Telenor ASA ADR is expected to generate 1.21 times more return on investment than Singapore Telecommunicatio. However, Telenor ASA is 1.21 times more volatile than Singapore Telecommunications PK. It trades about 0.01 of its potential returns per unit of risk. Singapore Telecommunications PK is currently generating about -0.22 per unit of risk. If you would invest 1,189 in Telenor ASA ADR on August 29, 2024 and sell it today you would lose (1.00) from holding Telenor ASA ADR or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA ADR vs. Singapore Telecommunications P
Performance |
| Timeline |
| Telenor ASA ADR |
| Singapore Telecommunicatio |
Telenor ASA and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Singapore Telecommunicatio
The main advantage of trading using opposite Telenor ASA and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA 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.| Telenor ASA vs. HUMANA INC | Telenor ASA vs. SCOR PK | Telenor ASA vs. Aquagold International | Telenor ASA vs. Barloworld Ltd ADR |
| Singapore Telecommunicatio vs. KDDI Corp | Singapore Telecommunicatio vs. Amrica Mvil, SAB | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. FingerMotion |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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