Correlation Between Kuehne Nagel and SINGAPORE POST

Can any of the company-specific risk be diversified away by investing in both Kuehne Nagel and SINGAPORE POST 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 Kuehne Nagel and SINGAPORE POST into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kuehne Nagel International and SINGAPORE POST, you can compare the effects of market volatilities on Kuehne Nagel and SINGAPORE POST 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 Kuehne Nagel with a short position of SINGAPORE POST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuehne Nagel and SINGAPORE POST.

Diversification Opportunities for Kuehne Nagel and SINGAPORE POST

-0.61

Correlation Coefficient

Kuehne Nagel  SINGAPORE POST

Excellent diversification

The 3 months correlation between Kuehne and SINGAPORE is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kuehne Nagel International and SINGAPORE POST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE POST and Kuehne Nagel 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 Kuehne Nagel International are associated (or correlated) with SINGAPORE POST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE POST has no effect on the direction of Kuehne Nagel i.e., Kuehne Nagel and SINGAPORE POST go up and down completely randomly.

Pair Corralation between Kuehne Nagel and SINGAPORE POST

Assuming the 90 days trading horizon Kuehne Nagel International is expected to under-perform the SINGAPORE POST. But the stock apears to be less risky and, when comparing its historical volatility, Kuehne Nagel International is 1.89 times less risky than SINGAPORE POST. The stock trades about -0.13 of its potential returns per unit of risk. The SINGAPORE POST is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  31.00  in SINGAPORE POST on September 25, 2024 and sell it today you would earn a total of  3.00  from holding SINGAPORE POST or generate 9.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Kuehne Nagel International  vs.  SINGAPORE POST

Kuehne Nagel Interna

Risk-Adjusted Performance

0 of 100

Very Weak

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

SINGAPORE POST

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE POST are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SINGAPORE POST may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kuehne Nagel and SINGAPORE POST

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

The idea behind Kuehne Nagel International and SINGAPORE POST 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 Transaction History module to view history of all your transactions and understand their impact on performance.