Correlation Between Turk Telekomunikasyon and Singapore Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Turk Telekomunikasyon and Singapore Telecommunicatio 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 Turk Telekomunikasyon and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turk Telekomunikasyon AS and Singapore Telecommunications Limited, you can compare the effects of market volatilities on Turk Telekomunikasyon and Singapore Telecommunicatio 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 Turk Telekomunikasyon with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turk Telekomunikasyon and Singapore Telecommunicatio.

Diversification Opportunities for Turk Telekomunikasyon and Singapore Telecommunicatio

0.62

Correlation Coefficient

Turk Telekomunikasyon  Singapore Telecommunicatio

Poor diversification

The 3 months correlation between Turk and Singapore is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Turk Telekomunikasyon AS and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Turk Telekomunikasyon 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 Turk Telekomunikasyon AS are associated (or correlated) with Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Turk Telekomunikasyon i.e., Turk Telekomunikasyon and Singapore Telecommunicatio go up and down completely randomly.

Pair Corralation between Turk Telekomunikasyon and Singapore Telecommunicatio

Assuming the 90 days horizon Turk Telekomunikasyon AS is expected to under-perform the Singapore Telecommunicatio. In addition to that, Turk Telekomunikasyon is 1.04 times more volatile than Singapore Telecommunications Limited. It trades about -0.22 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about -0.16 per unit of volatility. If you would invest  232.00  in Singapore Telecommunications Limited on September 14, 2024 and sell it today you would lose (7.00) from holding Singapore Telecommunications Limited or give up 3.02% of portfolio value over 90 days.

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

Turk Telekomunikasyon AS  vs.  Singapore Telecommunications L

Turk Telekomunikasyon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turk Telekomunikasyon AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Turk Telekomunikasyon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 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 Turk Telekomunikasyon and Singapore Telecommunicatio

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

The idea behind Turk Telekomunikasyon AS and Singapore Telecommunications Limited 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.