Correlation Between Singha Estate and Frasers Property

Can any of the company-specific risk be diversified away by investing in both Singha Estate and Frasers Property 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 Singha Estate and Frasers Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Singha Estate Public and Frasers Property Public, you can compare the effects of market volatilities on Singha Estate and Frasers Property 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 Singha Estate with a short position of Frasers Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singha Estate and Frasers Property.

Diversification Opportunities for Singha Estate and Frasers Property

0.55

Correlation Coefficient

Singha Estate  Frasers Property

Very weak diversification

The 3 months correlation between Singha and Frasers is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Singha Estate Public and Frasers Property Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frasers Property Public and Singha Estate 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 Singha Estate Public are associated (or correlated) with Frasers Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frasers Property Public has no effect on the direction of Singha Estate i.e., Singha Estate and Frasers Property go up and down completely randomly.

Pair Corralation between Singha Estate and Frasers Property

Assuming the 90 days trading horizon Singha Estate Public is expected to generate 61.57 times more return on investment than Frasers Property. However, Singha Estate is 61.57 times more volatile than Frasers Property Public. It trades about 0.11 of its potential returns per unit of risk. Frasers Property Public is currently generating about -0.14 per unit of risk. If you would invest  131.00  in Singha Estate Public on October 12, 2024 and sell it today you would lose (55.00) from holding Singha Estate Public or give up 41.98% of portfolio value over 90 days.

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

Singha Estate Public  vs.  Frasers Property Public

Singha Estate Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Singha Estate Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Singha Estate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Frasers Property Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frasers Property Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Singha Estate and Frasers Property

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

The idea behind Singha Estate Public and Frasers Property Public 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.