Correlation Between Frasers Property and Singha Estate
Can any of the company-specific risk be diversified away by investing in both Frasers Property and Singha Estate 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 Frasers Property and Singha Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frasers Property Public and Singha Estate Public, you can compare the effects of market volatilities on Frasers Property and Singha Estate 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 Frasers Property with a short position of Singha Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frasers Property and Singha Estate.
Diversification Opportunities for Frasers Property and Singha Estate
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Frasers and Singha is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Frasers Property Public and Singha Estate Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singha Estate Public and Frasers Property 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 Frasers Property Public are associated (or correlated) with Singha Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singha Estate Public has no effect on the direction of Frasers Property i.e., Frasers Property and Singha Estate go up and down completely randomly.
Pair Corralation between Frasers Property and Singha Estate
Assuming the 90 days trading horizon Frasers Property Public is expected to generate 0.36 times more return on investment than Singha Estate. However, Frasers Property Public is 2.79 times less risky than Singha Estate. It trades about -0.03 of its potential returns per unit of risk. Singha Estate Public is currently generating about -0.12 per unit of risk. If you would invest 1,250 in Frasers Property Public on September 24, 2024 and sell it today you would lose (40.00) from holding Frasers Property Public or give up 3.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Frasers Property Public vs. Singha Estate Public
Performance |
Timeline |
Frasers Property Public |
Singha Estate Public |
Frasers Property and Singha Estate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Frasers Property and Singha Estate
The main advantage of trading using opposite Frasers Property and Singha Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frasers Property position performs unexpectedly, Singha Estate 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 Singha Estate will offset losses from the drop in Singha Estate's long position.Frasers Property vs. Supalai Public | Frasers Property vs. Singha Estate Public | Frasers Property vs. Areeya Property Public | Frasers Property vs. Asset Five Group |
Singha Estate vs. Supalai Public | Singha Estate vs. Frasers Property Public | Singha Estate vs. Areeya Property Public | Singha Estate vs. Asset Five Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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