Correlation Between Singapore Telecommunicatio and International Business

Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on Singapore Telecommunicatio and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and International Business.

Diversification Opportunities for Singapore Telecommunicatio and International Business

0.31

Correlation Coefficient

Singapore Telecommunicatio  International Business

Weak diversification

The 3 months correlation between Singapore and International is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and International Business go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and International Business

If you would invest  0.00  in International Business Machines on October 24, 2024 and sell it today you would earn a total of  0.00  from holding International Business Machines or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.23%
Values	Daily Returns

Singapore Telecommunications L  vs.  International Business Machine

Singapore Telecommunicatio

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Telecommunications Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Singapore Telecommunicatio is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

International Business

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, International Business is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Singapore Telecommunicatio and International Business

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

The idea behind Singapore Telecommunications Limited and International Business Machines 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.