Correlation Between Singapore Exchange and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Singapore Exchange and Hong Kong 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 Singapore Exchange and Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Exchange Ltd and Hong Kong Exchange, you can compare the effects of market volatilities on Singapore Exchange and Hong Kong 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 Singapore Exchange with a short position of Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Exchange and Hong Kong.
Diversification Opportunities for Singapore Exchange and Hong Kong
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singapore and Hong is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Exchange Ltd and Hong Kong Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchange and Singapore Exchange 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 Singapore Exchange Ltd are associated (or correlated) with Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchange has no effect on the direction of Singapore Exchange i.e., Singapore Exchange and Hong Kong go up and down completely randomly.
Pair Corralation between Singapore Exchange and Hong Kong
Assuming the 90 days horizon Singapore Exchange Ltd is expected to generate 0.67 times more return on investment than Hong Kong. However, Singapore Exchange Ltd is 1.5 times less risky than Hong Kong. It trades about -0.35 of its potential returns per unit of risk. Hong Kong Exchange is currently generating about -0.31 per unit of risk. If you would invest 10,644 in Singapore Exchange Ltd on January 20, 2024 and sell it today you would lose (755.00) from holding Singapore Exchange Ltd or give up 7.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Singapore Exchange Ltd vs. Hong Kong Exchange
Performance |
| Timeline |
| Singapore Exchange |
| Hong Kong Exchange |
Singapore Exchange and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Exchange and Hong Kong
The main advantage of trading using opposite Singapore Exchange and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Exchange position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| Singapore Exchange vs. Hong Kong Exchanges | Singapore Exchange vs. MSCI Inc | Singapore Exchange vs. Otc Markets Group | Singapore Exchange vs. Dun Bradstreet Holdings |
| Hong Kong vs. Hong Kong Exchanges | Hong Kong vs. MSCI Inc | Hong Kong vs. Otc Markets Group | Hong Kong 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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