Correlation Between Singapore Telecommunicatio and Atrium Ljungberg
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Atrium Ljungberg 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 Singapore Telecommunicatio and Atrium Ljungberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Telecommunications Limited and Atrium Ljungberg AB, you can compare the effects of market volatilities on Singapore Telecommunicatio and Atrium Ljungberg 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 Singapore Telecommunicatio with a short position of Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Atrium Ljungberg.
Diversification Opportunities for Singapore Telecommunicatio and Atrium Ljungberg
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Atrium is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg and Singapore Telecommunicatio 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 Singapore Telecommunications Limited are associated (or correlated) with Atrium Ljungberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Ljungberg has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Atrium Ljungberg go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Atrium Ljungberg
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.88 times more return on investment than Atrium Ljungberg. However, Singapore Telecommunications Limited is 1.13 times less risky than Atrium Ljungberg. It trades about 0.08 of its potential returns per unit of risk. Atrium Ljungberg AB is currently generating about -0.08 per unit of risk. If you would invest 218.00 in Singapore Telecommunications Limited on December 23, 2024 and sell it today you would earn a total of 15.00 from holding Singapore Telecommunications Limited or generate 6.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Singapore Telecommunications L vs. Atrium Ljungberg AB
Performance |
Timeline |
Singapore Telecommunicatio |
Atrium Ljungberg |
Singapore Telecommunicatio and Atrium Ljungberg Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Singapore Telecommunicatio and Atrium Ljungberg
The main advantage of trading using opposite Singapore Telecommunicatio and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Atrium Ljungberg 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 Atrium Ljungberg will offset losses from the drop in Atrium Ljungberg's long position.Singapore Telecommunicatio vs. Solstad Offshore ASA | Singapore Telecommunicatio vs. KENEDIX OFFICE INV | Singapore Telecommunicatio vs. Electronic Arts | Singapore Telecommunicatio vs. Autohome ADR |
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Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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