Correlation Between QinetiQ Group and Singapore Technologies

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

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

Diversification Opportunities for QinetiQ Group and Singapore Technologies

0.19

Correlation Coefficient

QinetiQ Group  Singapore Technologies

Average diversification

The 3 months correlation between QinetiQ and Singapore is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding QinetiQ Group plc and Singapore Technologies Enginee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Technologies and QinetiQ Group 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 QinetiQ Group plc 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 QinetiQ Group i.e., QinetiQ Group and Singapore Technologies go up and down completely randomly.

Pair Corralation between QinetiQ Group and Singapore Technologies

Assuming the 90 days horizon QinetiQ Group plc is expected to under-perform the Singapore Technologies. But the pink sheet apears to be less risky and, when comparing its historical volatility, QinetiQ Group plc is 1.06 times less risky than Singapore Technologies. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Singapore Technologies Engineering is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  331.00  in Singapore Technologies Engineering on October 5, 2024 and sell it today you would earn a total of  5.00  from holding Singapore Technologies Engineering or generate 1.51% return on investment over 90 days.

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

QinetiQ Group plc  vs.  Singapore Technologies Enginee

QinetiQ Group plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QinetiQ Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 weak forward-looking signals, Singapore Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QinetiQ Group and Singapore Technologies

The main advantage of trading using opposite QinetiQ Group and Singapore Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QinetiQ Group 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 QinetiQ Group plc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.