Correlation Between Dun Bradstreet and Singapore Exchange

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

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

Diversification Opportunities for Dun Bradstreet and Singapore Exchange

0.36

Correlation Coefficient

Dun Bradstreet  Singapore Exchange

Weak diversification

The 3 months correlation between Dun and Singapore is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dun Bradstreet Holdings and Singapore Exchange Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Exchange and Dun Bradstreet 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 Dun Bradstreet Holdings are associated (or correlated) with Singapore Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Exchange has no effect on the direction of Dun Bradstreet i.e., Dun Bradstreet and Singapore Exchange go up and down completely randomly.

Pair Corralation between Dun Bradstreet and Singapore Exchange

Considering the 90-day investment horizon Dun Bradstreet Holdings is expected to generate 0.76 times more return on investment than Singapore Exchange. However, Dun Bradstreet Holdings is 1.31 times less risky than Singapore Exchange. It trades about 0.08 of its potential returns per unit of risk. Singapore Exchange Limited is currently generating about 0.0 per unit of risk. If you would invest  1,141  in Dun Bradstreet Holdings on September 19, 2024 and sell it today you would earn a total of  92.00  from holding Dun Bradstreet Holdings or generate 8.06% return on investment over 90 days.

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

Dun Bradstreet Holdings  vs.  Singapore Exchange Limited

Dun Bradstreet Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dun Bradstreet Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Dun Bradstreet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Singapore Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dun Bradstreet and Singapore Exchange

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

The idea behind Dun Bradstreet Holdings and Singapore Exchange 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.