Correlation Between Intercontinental and Singapore Exchange
Can any of the company-specific risk be diversified away by investing in both Intercontinental 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 Intercontinental and Singapore Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intercontinental Exchange and Singapore Exchange Ltd, you can compare the effects of market volatilities on Intercontinental 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 Intercontinental with a short position of Singapore Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intercontinental and Singapore Exchange.
Diversification Opportunities for Intercontinental and Singapore Exchange
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intercontinental and Singapore is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Intercontinental Exchange and Singapore Exchange Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Exchange and Intercontinental 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 Intercontinental Exchange 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 Intercontinental i.e., Intercontinental and Singapore Exchange go up and down completely randomly.
Pair Corralation between Intercontinental and Singapore Exchange
Considering the 90-day investment horizon Intercontinental Exchange is expected to generate 0.88 times more return on investment than Singapore Exchange. However, Intercontinental Exchange is 1.13 times less risky than Singapore Exchange. It trades about -0.19 of its potential returns per unit of risk. Singapore Exchange Ltd is currently generating about -0.28 per unit of risk. If you would invest 13,610 in Intercontinental Exchange on January 20, 2024 and sell it today you would lose (512.00) from holding Intercontinental Exchange or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intercontinental Exchange vs. Singapore Exchange Ltd
Performance |
| Timeline |
| Intercontinental Exchange |
| Singapore Exchange |
Intercontinental and Singapore Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intercontinental and Singapore Exchange
The main advantage of trading using opposite Intercontinental and Singapore Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intercontinental 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.| Intercontinental vs. Nasdaq Inc | Intercontinental vs. SP Global | Intercontinental vs. Moodys | Intercontinental vs. FactSet Research Systems |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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