Correlation Between Singapore Telecommunicatio and SPORTING

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

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

Diversification Opportunities for Singapore Telecommunicatio and SPORTING

-0.51

Correlation Coefficient

Singapore Telecommunicatio  SPORTING

Excellent diversification

The 3 months correlation between Singapore and SPORTING is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and SPORTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORTING and Singapore Telecommunicatio 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 Telecommunications Limited are associated (or correlated) with SPORTING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORTING has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and SPORTING go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and SPORTING

Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 1.01 times less return on investment than SPORTING. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 1.23 times less risky than SPORTING. It trades about 0.05 of its potential returns per unit of risk. SPORTING is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  78.00  in SPORTING on September 19, 2024 and sell it today you would earn a total of  24.00  from holding SPORTING or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Singapore Telecommunications L  vs.  SPORTING

Singapore Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SPORTING

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPORTING are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, SPORTING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Singapore Telecommunicatio and SPORTING

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

The idea behind Singapore Telecommunications Limited and SPORTING 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.