Correlation Between Singapore Telecommunicatio and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Singapore Telecommunicatio and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Ross Stores.
Diversification Opportunities for Singapore Telecommunicatio and Ross Stores
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singapore and Ross is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Ross Stores go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Ross Stores
Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to under-perform the Ross Stores. But the stock apears to be less risky and, when comparing its historical volatility, Singapore Telecommunications Limited is 1.08 times less risky than Ross Stores. The stock trades about -0.03 of its potential returns per unit of risk. The Ross Stores is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13,530 in Ross Stores on September 24, 2024 and sell it today you would earn a total of 674.00 from holding Ross Stores or generate 4.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.48% |
Values | Daily Returns |
Singapore Telecommunications L vs. Ross Stores
Performance |
Timeline |
Singapore Telecommunicatio |
Ross Stores |
Singapore Telecommunicatio and Ross Stores Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Singapore Telecommunicatio and Ross Stores
The main advantage of trading using opposite Singapore Telecommunicatio and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.The idea behind Singapore Telecommunications Limited and Ross Stores 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.
Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Microsoft |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |