Correlation Between Lumen Technologies and Singapore Telecommunicatio

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

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

Diversification Opportunities for Lumen Technologies and Singapore Telecommunicatio

0.07

Correlation Coefficient

Lumen Technologies  Singapore Telecommunicatio

Significant diversification

The 3 months correlation between Lumen and Singapore is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Lumen Technologies 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 Lumen Technologies 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 Lumen Technologies i.e., Lumen Technologies and Singapore Telecommunicatio go up and down completely randomly.

Pair Corralation between Lumen Technologies and Singapore Telecommunicatio

Given the investment horizon of 90 days Lumen Technologies is expected to under-perform the Singapore Telecommunicatio. In addition to that, Lumen Technologies is 3.21 times more volatile than Singapore Telecommunications PK. It trades about -0.34 of its total potential returns per unit of risk. Singapore Telecommunications PK is currently generating about 0.05 per unit of volatility. If you would invest  2,250  in Singapore Telecommunications PK on September 28, 2024 and sell it today you would earn a total of  22.00  from holding Singapore Telecommunications PK or generate 0.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Lumen Technologies  vs.  Singapore Telecommunications P

Lumen Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lumen Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Singapore Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Lumen Technologies and Singapore Telecommunicatio

The main advantage of trading using opposite Lumen Technologies and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies 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 Lumen Technologies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.