Correlation Between Power Assets and Singapore Telecommunicatio

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

By analyzing existing cross correlation between Power Assets Holdings and Singapore Telecommunications PK, you can compare the effects of market volatilities on Power Assets 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 Power Assets with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Assets and Singapore Telecommunicatio.

Diversification Opportunities for Power Assets and Singapore Telecommunicatio

-0.29

Correlation Coefficient

Power Assets  Singapore Telecommunicatio

Very good diversification

The 3 months correlation between Power and Singapore is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Power Assets Holdings and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Power Assets 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 Power Assets Holdings 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 Power Assets i.e., Power Assets and Singapore Telecommunicatio go up and down completely randomly.

Pair Corralation between Power Assets and Singapore Telecommunicatio

Assuming the 90 days horizon Power Assets Holdings is expected to under-perform the Singapore Telecommunicatio. In addition to that, Power Assets is 1.98 times more volatile than Singapore Telecommunications PK. It trades about -0.05 of its total potential returns per unit of risk. Singapore Telecommunications PK is currently generating about 0.19 per unit of volatility. If you would invest  2,273  in Singapore Telecommunications PK on December 22, 2024 and sell it today you would earn a total of  287.00  from holding Singapore Telecommunications PK or generate 12.63% return on investment over 90 days.

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

Power Assets Holdings  vs.  Singapore Telecommunications P

Power Assets Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Power Assets Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Singapore Telecommunicatio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Telecommunications PK are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Singapore Telecommunicatio showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Power Assets and Singapore Telecommunicatio

The main advantage of trading using opposite Power Assets and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Assets 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 Power Assets Holdings and Singapore Telecommunications PK 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.