Correlation Between Cboe Global and SINGAPORE EXUNSPADR15

Can any of the company-specific risk be diversified away by investing in both Cboe Global and SINGAPORE EXUNSPADR15 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 Cboe Global and SINGAPORE EXUNSPADR15 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cboe Global Markets and SINGAPORE EXUNSPADR15, you can compare the effects of market volatilities on Cboe Global and SINGAPORE EXUNSPADR15 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 Cboe Global with a short position of SINGAPORE EXUNSPADR15. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe Global and SINGAPORE EXUNSPADR15.

Diversification Opportunities for Cboe Global and SINGAPORE EXUNSPADR15

0.71

Correlation Coefficient

Cboe Global  SINGAPORE EXUNSPADR15

Poor diversification

The 3 months correlation between Cboe and SINGAPORE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cboe Global Markets and SINGAPORE EXUNSPADR15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE EXUNSPADR15 and Cboe Global 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 Cboe Global Markets are associated (or correlated) with SINGAPORE EXUNSPADR15. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE EXUNSPADR15 has no effect on the direction of Cboe Global i.e., Cboe Global and SINGAPORE EXUNSPADR15 go up and down completely randomly.

Pair Corralation between Cboe Global and SINGAPORE EXUNSPADR15

Assuming the 90 days horizon Cboe Global is expected to generate 84.9 times less return on investment than SINGAPORE EXUNSPADR15. But when comparing it to its historical volatility, Cboe Global Markets is 1.15 times less risky than SINGAPORE EXUNSPADR15. It trades about 0.0 of its potential returns per unit of risk. SINGAPORE EXUNSPADR15 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,494  in SINGAPORE EXUNSPADR15 on September 17, 2024 and sell it today you would earn a total of  156.00  from holding SINGAPORE EXUNSPADR15 or generate 10.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cboe Global Markets  vs.  SINGAPORE EXUNSPADR15

Cboe Global Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

SINGAPORE EXUNSPADR15

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE EXUNSPADR15 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SINGAPORE EXUNSPADR15 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cboe Global and SINGAPORE EXUNSPADR15

The main advantage of trading using opposite Cboe Global and SINGAPORE EXUNSPADR15 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe Global position performs unexpectedly, SINGAPORE EXUNSPADR15 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 EXUNSPADR15 will offset losses from the drop in SINGAPORE EXUNSPADR15's long position.

The idea behind Cboe Global Markets and SINGAPORE EXUNSPADR15 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.