Correlation Between América Móvil, and Singapore Telecommunicatio

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

By analyzing existing cross correlation between Amrica Mvil, SAB and Singapore Telecommunications Limited, you can compare the effects of market volatilities on América Móvil, and Singapore Telecommunicatio 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 América Móvil, with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of América Móvil, and Singapore Telecommunicatio.

Diversification Opportunities for América Móvil, and Singapore Telecommunicatio

0.01

Correlation Coefficient

América Móvil,  Singapore Telecommunicatio

Significant diversification

The 3 months correlation between América and Singapore is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Amrica Mvil, SAB and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and América Móvil, 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 Amrica Mvil, SAB are associated (or correlated) with Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of América Móvil, i.e., América Móvil, and Singapore Telecommunicatio go up and down completely randomly.

Pair Corralation between América Móvil, and Singapore Telecommunicatio

Assuming the 90 days horizon Amrica Mvil, SAB is expected to under-perform the Singapore Telecommunicatio. In addition to that, América Móvil, is 1.34 times more volatile than Singapore Telecommunications Limited. It trades about -0.04 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.09 per unit of volatility. If you would invest  227.00  in Singapore Telecommunications Limited on December 30, 2024 and sell it today you would earn a total of  26.00  from holding Singapore Telecommunications Limited or generate 11.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.71%
Values	Daily Returns

Amrica Mvil, SAB  vs.  Singapore Telecommunications L

Amrica Mvil, SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amrica Mvil, SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Singapore Telecommunicatio

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Telecommunications Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Singapore Telecommunicatio reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with América Móvil, and Singapore Telecommunicatio

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

The idea behind Amrica Mvil, SAB and Singapore Telecommunications Limited 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 Stocks Directory module to find actively traded stocks across global markets.