Correlation Between Singapore Telecommunicatio and DBS Group
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Singapore Telecommunications P vs. DBS Group Holdings
Performance |
Timeline |
Singapore Telecommunicatio |
DBS Group Holdings |
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.Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Comcast Corp |
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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.
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