Correlation Between Conrad Industries and Singapore Technologies

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

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

Diversification Opportunities for Conrad Industries and Singapore Technologies

-0.38

Correlation Coefficient

Conrad Industries  Singapore Technologies

Very good diversification

The 3 months correlation between Conrad and Singapore is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Conrad Industries and Singapore Technologies Enginee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Technologies and Conrad Industries 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 Conrad Industries are associated (or correlated) with Singapore Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Technologies has no effect on the direction of Conrad Industries i.e., Conrad Industries and Singapore Technologies go up and down completely randomly.

Pair Corralation between Conrad Industries and Singapore Technologies

If you would invest  303.00  in Singapore Technologies Engineering on September 30, 2024 and sell it today you would earn a total of  33.00  from holding Singapore Technologies Engineering or generate 10.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Conrad Industries  vs.  Singapore Technologies Enginee

Conrad Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conrad Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Conrad Industries is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Singapore Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Technologies Engineering are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Singapore Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Conrad Industries and Singapore Technologies

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

The idea behind Conrad Industries and Singapore Technologies Engineering 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.