Correlation Between Singapore Telecommunicatio and Amalphi Ag

Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Amalphi Ag 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 Amalphi Ag 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 amalphi ag, you can compare the effects of market volatilities on Singapore Telecommunicatio and Amalphi Ag 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 Amalphi Ag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Amalphi Ag.

Diversification Opportunities for Singapore Telecommunicatio and Amalphi Ag

0.32

Correlation Coefficient

Singapore Telecommunicatio  Amalphi Ag

Weak diversification

The 3 months correlation between Singapore and Amalphi is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and amalphi ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on amalphi ag 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 Amalphi Ag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of amalphi ag has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Amalphi Ag go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and Amalphi Ag

Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 10.76 times less return on investment than Amalphi Ag. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 5.93 times less risky than Amalphi Ag. It trades about 0.01 of its potential returns per unit of risk. amalphi ag is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  71.00  in amalphi ag on September 15, 2024 and sell it today you would lose (15.00) from holding amalphi ag or give up 21.13% of portfolio value over 90 days.

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

Singapore Telecommunications L  vs.  amalphi ag

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

amalphi ag

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days amalphi ag has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Amalphi Ag may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Singapore Telecommunicatio and Amalphi Ag

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

The idea behind Singapore Telecommunications Limited and amalphi ag 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.