Correlation Between Singapore Telecommunicatio and CryoLife

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

Diversification Opportunities for Singapore Telecommunicatio and CryoLife

-0.18

Correlation Coefficient

Singapore Telecommunicatio  CryoLife

Good diversification

The 3 months correlation between Singapore and CryoLife is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife 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 CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and CryoLife go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and CryoLife

Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 1.13 times more return on investment than CryoLife. However, Singapore Telecommunicatio is 1.13 times more volatile than CryoLife. It trades about 0.03 of its potential returns per unit of risk. CryoLife is currently generating about 0.02 per unit of risk. If you would invest  215.00  in Singapore Telecommunications Limited on September 23, 2024 and sell it today you would earn a total of  2.00  from holding Singapore Telecommunications Limited or generate 0.93% return on investment over 90 days.

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

Singapore Telecommunications L  vs.  CryoLife

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.

CryoLife

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CryoLife are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CryoLife reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Singapore Telecommunicatio and CryoLife

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

The idea behind Singapore Telecommunications Limited and CryoLife 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.