Correlation Between Singapore Telecommunicatio and DBS Group

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and DBS Group 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 DBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Telecommunications PK and DBS Group Holdings, you can compare the effects of market volatilities on Singapore Telecommunicatio and DBS Group 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 DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and DBS Group.

Diversification Opportunities for Singapore Telecommunicatio and DBS Group

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Singapore and DBS is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications P and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings 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 PK are associated (or correlated) with DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and DBS Group go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and DBS Group

Assuming the 90 days horizon Singapore Telecommunications PK is expected to under-perform the DBS Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Singapore Telecommunications PK is 1.09 times less risky than DBS Group. The pink sheet trades about -0.01 of its potential returns per unit of risk. The DBS Group Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  11,085  in DBS Group Holdings on September 5, 2024 and sell it today you would earn a total of  1,887  from holding DBS Group Holdings or generate 17.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Singapore Telecommunications P  vs.  DBS Group Holdings

 Performance 
       Timeline  
Singapore Telecommunicatio 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Singapore Telecommunications PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Singapore Telecommunicatio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
DBS Group Holdings 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in DBS Group Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, DBS Group showed solid returns over the last few months and may actually be approaching a breakup point.

Singapore Telecommunicatio and DBS Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Singapore Telecommunicatio and DBS Group

The main advantage of trading using opposite Singapore Telecommunicatio and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group's long position.
The idea behind Singapore Telecommunications PK and DBS Group Holdings 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.
Check out your portfolio center.
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Content Syndication
Quickly integrate customizable finance content to your own investment portal