Correlation Between Singtex Industrial and Chief Telecom

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

By analyzing existing cross correlation between Singtex Industrial Co and Chief Telecom, you can compare the effects of market volatilities on Singtex Industrial and Chief Telecom 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 Singtex Industrial with a short position of Chief Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singtex Industrial and Chief Telecom.

Diversification Opportunities for Singtex Industrial and Chief Telecom

-0.47

Correlation Coefficient

Singtex Industrial  Chief Telecom

Very good diversification

The 3 months correlation between Singtex and Chief is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Singtex Industrial Co and Chief Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chief Telecom and Singtex Industrial 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 Singtex Industrial Co are associated (or correlated) with Chief Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chief Telecom has no effect on the direction of Singtex Industrial i.e., Singtex Industrial and Chief Telecom go up and down completely randomly.

Pair Corralation between Singtex Industrial and Chief Telecom

Assuming the 90 days trading horizon Singtex Industrial Co is expected to under-perform the Chief Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Singtex Industrial Co is 3.59 times less risky than Chief Telecom. The stock trades about -0.07 of its potential returns per unit of risk. The Chief Telecom is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  47,800  in Chief Telecom on September 15, 2024 and sell it today you would lose (750.00) from holding Chief Telecom or give up 1.57% of portfolio value over 90 days.

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

Singtex Industrial Co  vs.  Chief Telecom

Singtex Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singtex Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Singtex Industrial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Chief Telecom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chief Telecom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chief Telecom is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Singtex Industrial and Chief Telecom

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

The idea behind Singtex Industrial Co and Chief Telecom 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.