Correlation Between Deutsche Boerse and Singapore Exchange
Can any of the company-specific risk be diversified away by investing in both Deutsche Boerse and Singapore Exchange 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 Deutsche Boerse and Singapore Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Boerse AG and Singapore Exchange Ltd, you can compare the effects of market volatilities on Deutsche Boerse and Singapore Exchange 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 Deutsche Boerse with a short position of Singapore Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Boerse and Singapore Exchange.
Diversification Opportunities for Deutsche Boerse and Singapore Exchange
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and Singapore is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Boerse AG and Singapore Exchange Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Exchange and Deutsche Boerse 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 Deutsche Boerse AG are associated (or correlated) with Singapore Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Exchange has no effect on the direction of Deutsche Boerse i.e., Deutsche Boerse and Singapore Exchange go up and down completely randomly.
Pair Corralation between Deutsche Boerse and Singapore Exchange
Assuming the 90 days horizon Deutsche Boerse AG is expected to under-perform the Singapore Exchange. In addition to that, Deutsche Boerse is 1.67 times more volatile than Singapore Exchange Ltd. It trades about -0.16 of its total potential returns per unit of risk. Singapore Exchange Ltd is currently generating about 0.03 per unit of volatility. If you would invest 10,228 in Singapore Exchange Ltd on January 26, 2024 and sell it today you would earn a total of 43.00 from holding Singapore Exchange Ltd or generate 0.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Deutsche Boerse AG vs. Singapore Exchange Ltd
Performance |
Timeline |
Deutsche Boerse AG |
Singapore Exchange |
Deutsche Boerse and Singapore Exchange Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Deutsche Boerse and Singapore Exchange
The main advantage of trading using opposite Deutsche Boerse and Singapore Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Boerse position performs unexpectedly, Singapore Exchange 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 Exchange will offset losses from the drop in Singapore Exchange's long position.Deutsche Boerse vs. TMX Group Limited | Deutsche Boerse vs. Otc Markets Group | Deutsche Boerse vs. CME Group | Deutsche Boerse vs. Moodys |
Singapore Exchange vs. TMX Group Limited | Singapore Exchange vs. Otc Markets Group | Singapore Exchange vs. CME Group | Singapore Exchange vs. Moodys |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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