Correlation Between Euronext and Singapore Exchange
Can any of the company-specific risk be diversified away by investing in both Euronext 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 Euronext and Singapore Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euronext NV and Singapore Exchange Ltd, you can compare the effects of market volatilities on Euronext 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 Euronext with a short position of Singapore Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euronext and Singapore Exchange.
Diversification Opportunities for Euronext and Singapore Exchange
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Euronext and Singapore is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Euronext NV and Singapore Exchange Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Exchange and Euronext 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 Euronext NV 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 Euronext i.e., Euronext and Singapore Exchange go up and down completely randomly.
Pair Corralation between Euronext and Singapore Exchange
Assuming the 90 days horizon Euronext NV is expected to generate 0.24 times more return on investment than Singapore Exchange. However, Euronext NV is 4.24 times less risky than Singapore Exchange. It trades about 0.21 of its potential returns per unit of risk. Singapore Exchange Ltd is currently generating about -0.29 per unit of risk. If you would invest 9,317 in Euronext NV on January 19, 2024 and sell it today you would earn a total of 103.00 from holding Euronext NV or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euronext NV vs. Singapore Exchange Ltd
Performance |
| Timeline |
| Euronext NV |
| Singapore Exchange |
Euronext and Singapore Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euronext and Singapore Exchange
The main advantage of trading using opposite Euronext and Singapore Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euronext 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.| Euronext vs. Hong Kong Exchanges | Euronext vs. MSCI Inc | Euronext vs. Otc Markets Group | Euronext vs. Dun Bradstreet Holdings |
| Singapore Exchange vs. Hong Kong Exchanges | Singapore Exchange vs. MSCI Inc | Singapore Exchange vs. Otc Markets Group | Singapore Exchange vs. Dun Bradstreet Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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