Correlation Between Singapore Exchange and Nasdaq

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

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

Diversification Opportunities for Singapore Exchange and Nasdaq

0.45

Correlation Coefficient

Singapore Exchange  Nasdaq

Very weak diversification

The 3 months correlation between Singapore and Nasdaq is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Exchange Limited and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc and Singapore Exchange 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 Exchange Limited are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Singapore Exchange i.e., Singapore Exchange and Nasdaq go up and down completely randomly.

Pair Corralation between Singapore Exchange and Nasdaq

Assuming the 90 days horizon Singapore Exchange is expected to generate 12.77 times less return on investment than Nasdaq. In addition to that, Singapore Exchange is 2.11 times more volatile than Nasdaq Inc. It trades about 0.0 of its total potential returns per unit of risk. Nasdaq Inc is currently generating about 0.07 per unit of volatility. If you would invest  7,407  in Nasdaq Inc on September 20, 2024 and sell it today you would earn a total of  340.00  from holding Nasdaq Inc or generate 4.59% return on investment over 90 days.

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

Singapore Exchange Limited  vs.  Nasdaq Inc

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

Nasdaq Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Singapore Exchange and Nasdaq

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

The idea behind Singapore Exchange Limited and Nasdaq Inc 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 CEOs Directory module to screen CEOs from public companies around the world.