Correlation Between Singapore Exchange and Value Line

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Can any of the company-specific risk be diversified away by investing in both Singapore Exchange and Value Line 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 Value Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Exchange and Value Line, you can compare the effects of market volatilities on Singapore Exchange and Value Line 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 Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Exchange and Value Line.

Diversification Opportunities for Singapore Exchange and Value Line

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Singapore and Value is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Exchange Ltd and Value Line in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line 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 are associated (or correlated) with Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line has no effect on the direction of Singapore Exchange i.e., Singapore Exchange and Value Line go up and down completely randomly.

Pair Corralation between Singapore Exchange and Value Line

Assuming the 90 days horizon Singapore Exchange is expected to generate 0.73 times more return on investment than Value Line. However, Singapore Exchange is 1.37 times less risky than Value Line. It trades about -0.09 of its potential returns per unit of risk. Value Line is currently generating about -0.21 per unit of risk. If you would invest  10,637  in Singapore Exchange on December 29, 2023 and sell it today you would lose (261.00) from holding Singapore Exchange or give up 2.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Singapore Exchange Ltd  vs.  Value Line

 Performance 
       Timeline  
Singapore Exchange 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days Singapore Exchange has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Singapore Exchange is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Value Line 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Value Line has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Singapore Exchange and Value Line Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Singapore Exchange and Value Line

The main advantage of trading using opposite Singapore Exchange and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Exchange position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.
The idea behind Singapore Exchange and Value Line pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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