Correlation Between Singapore Telecommunicatio and MAG Silver

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

Diversification Opportunities for Singapore Telecommunicatio and MAG Silver

-0.26

Correlation Coefficient

Singapore Telecommunicatio  MAG Silver

Very good diversification

The 3 months correlation between Singapore and MAG is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and MAG Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Silver Corp 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 MAG Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG Silver Corp has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and MAG Silver go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and MAG Silver

Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 16.76 times less return on investment than MAG Silver. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 1.8 times less risky than MAG Silver. It trades about 0.03 of its potential returns per unit of risk. MAG Silver Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,318  in MAG Silver Corp on October 25, 2024 and sell it today you would earn a total of  137.00  from holding MAG Silver Corp or generate 10.39% return on investment over 90 days.

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

Singapore Telecommunications L  vs.  MAG Silver Corp

Singapore Telecommunicatio

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Telecommunications Limited are ranked lower than 1 (%) 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

MAG Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAG Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Singapore Telecommunicatio and MAG Silver

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

The idea behind Singapore Telecommunications Limited and MAG Silver Corp 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.