Correlation Between Singapore Telecommunicatio and UMWELTBANK

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

Diversification Opportunities for Singapore Telecommunicatio and UMWELTBANK

-0.15

Correlation Coefficient

Singapore Telecommunicatio  UMWELTBANK

Good diversification

The 3 months correlation between Singapore and UMWELTBANK is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and UMWELTBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMWELTBANK 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 UMWELTBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMWELTBANK has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and UMWELTBANK go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and UMWELTBANK

Assuming the 90 days trading horizon Singapore Telecommunications Limited is expected to generate 0.62 times more return on investment than UMWELTBANK. However, Singapore Telecommunications Limited is 1.62 times less risky than UMWELTBANK. It trades about 0.05 of its potential returns per unit of risk. UMWELTBANK is currently generating about -0.05 per unit of risk. If you would invest  163.00  in Singapore Telecommunications Limited on September 29, 2024 and sell it today you would earn a total of  53.00  from holding Singapore Telecommunications Limited or generate 32.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Singapore Telecommunications L  vs.  UMWELTBANK

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.

UMWELTBANK

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UMWELTBANK are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward-looking signals, UMWELTBANK exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Singapore Telecommunicatio and UMWELTBANK

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

The idea behind Singapore Telecommunications Limited and UMWELTBANK 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.