Correlation Between Telefonica Brasil and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Telefonica Brasil 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 Telefonica Brasil and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonica Brasil SA and Singapore Telecommunications PK, you can compare the effects of market volatilities on Telefonica Brasil 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 Telefonica Brasil with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonica Brasil and Singapore Telecommunicatio.
Diversification Opportunities for Telefonica Brasil and Singapore Telecommunicatio
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telefonica and Singapore is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Telefonica Brasil SA and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Telefonica Brasil 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 Telefonica Brasil SA 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 Telefonica Brasil i.e., Telefonica Brasil and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Telefonica Brasil and Singapore Telecommunicatio
Considering the 90-day investment horizon Telefonica Brasil SA is expected to under-perform the Singapore Telecommunicatio. In addition to that, Telefonica Brasil is 1.39 times more volatile than Singapore Telecommunications PK. It trades about -0.07 of its total potential returns per unit of risk. Singapore Telecommunications PK is currently generating about 0.1 per unit of volatility. If you would invest 1,718 in Singapore Telecommunications PK on October 2, 2024 and sell it today you would earn a total of 550.00 from holding Singapore Telecommunications PK or generate 32.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.56% |
Values | Daily Returns |
Telefonica Brasil SA vs. Singapore Telecommunications P
Performance |
Timeline |
Telefonica Brasil |
Singapore Telecommunicatio |
Telefonica Brasil and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telefonica Brasil and Singapore Telecommunicatio
The main advantage of trading using opposite Telefonica Brasil and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonica Brasil 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.Telefonica Brasil vs. Vodafone Group PLC | Telefonica Brasil vs. Grupo Televisa SAB | Telefonica Brasil vs. America Movil SAB | Telefonica Brasil vs. Telefonica SA ADR |
Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Comcast Corp | Singapore Telecommunicatio vs. Deutsche Telekom AG |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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