Correlation Between Singapore Telecommunicatio and RADIANCE HLDGS

Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and RADIANCE HLDGS 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 RADIANCE HLDGS 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 RADIANCE HLDGS GRPHD 01, you can compare the effects of market volatilities on Singapore Telecommunicatio and RADIANCE HLDGS 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 RADIANCE HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and RADIANCE HLDGS.

Diversification Opportunities for Singapore Telecommunicatio and RADIANCE HLDGS

-0.19

Correlation Coefficient

Singapore Telecommunicatio  RADIANCE HLDGS

Good diversification

The 3 months correlation between Singapore and RADIANCE is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and RADIANCE HLDGS GRPHD 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RADIANCE HLDGS GRPHD 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 RADIANCE HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RADIANCE HLDGS GRPHD has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and RADIANCE HLDGS go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and RADIANCE HLDGS

Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 1.99 times less return on investment than RADIANCE HLDGS. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 3.79 times less risky than RADIANCE HLDGS. It trades about 0.1 of its potential returns per unit of risk. RADIANCE HLDGS GRPHD 01 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  31.00  in RADIANCE HLDGS GRPHD 01 on September 24, 2024 and sell it today you would earn a total of  6.00  from holding RADIANCE HLDGS GRPHD 01 or generate 19.35% 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.  RADIANCE HLDGS GRPHD 01

Singapore Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singapore Telecommunications Limited has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

RADIANCE HLDGS GRPHD

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in RADIANCE HLDGS GRPHD 01 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, RADIANCE HLDGS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Singapore Telecommunicatio and RADIANCE HLDGS

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

The idea behind Singapore Telecommunications Limited and RADIANCE HLDGS GRPHD 01 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 Commodity Directory module to find actively traded commodities issued by global exchanges.