Correlation Between KT and Singapore Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both KT and Singapore Telecommunicatio 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 KT and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KT Corporation and Singapore Telecommunications Limited, you can compare the effects of market volatilities on KT and Singapore Telecommunicatio 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 KT with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and Singapore Telecommunicatio.

Diversification Opportunities for KT and Singapore Telecommunicatio

0.48

Correlation Coefficient

KT  Singapore Telecommunicatio

Very weak diversification

The 3 months correlation between KT and Singapore is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and KT 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 KT Corporation are associated (or correlated) with Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of KT i.e., KT and Singapore Telecommunicatio go up and down completely randomly.

Pair Corralation between KT and Singapore Telecommunicatio

Allowing for the 90-day total investment horizon KT Corporation is expected to generate 0.43 times more return on investment than Singapore Telecommunicatio. However, KT Corporation is 2.35 times less risky than Singapore Telecommunicatio. It trades about 0.08 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about -0.03 per unit of risk. If you would invest  1,948  in KT Corporation on May 7, 2025 and sell it today you would earn a total of  108.00  from holding KT Corporation or generate 5.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

KT Corp.  vs.  Singapore Telecommunications L

KT Corporation

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in KT Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, KT is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Singapore Telecommunicatio

Risk-Adjusted Performance

Weakest

Over the last 90 days Singapore Telecommunications Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Singapore Telecommunicatio is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KT and Singapore Telecommunicatio

The main advantage of trading using opposite KT and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT position performs unexpectedly, Singapore Telecommunicatio 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 Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's long position.

The idea behind KT Corporation and Singapore Telecommunications Limited 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.