Correlation Between SUPERNOVA METALS and Singapore Telecommunicatio

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

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

Diversification Opportunities for SUPERNOVA METALS and Singapore Telecommunicatio

-0.35

Correlation Coefficient

SUPERNOVA METALS  Singapore Telecommunicatio

Very good diversification

The 3 months correlation between SUPERNOVA and Singapore is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SUPERNOVA METALS P and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and SUPERNOVA METALS 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 SUPERNOVA METALS P 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 SUPERNOVA METALS i.e., SUPERNOVA METALS and Singapore Telecommunicatio go up and down completely randomly.

Pair Corralation between SUPERNOVA METALS and Singapore Telecommunicatio

Assuming the 90 days horizon SUPERNOVA METALS P is expected to generate 8.3 times more return on investment than Singapore Telecommunicatio. However, SUPERNOVA METALS is 8.3 times more volatile than Singapore Telecommunications Limited. It trades about 0.1 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.08 per unit of risk. If you would invest  3.75  in SUPERNOVA METALS P on April 5, 2025 and sell it today you would earn a total of  24.25  from holding SUPERNOVA METALS P or generate 646.67% return on investment over 90 days.

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

SUPERNOVA METALS P  vs.  Singapore Telecommunications L

SUPERNOVA METALS P

Risk-Adjusted Performance

Very Weak

Over the last 90 days SUPERNOVA METALS P 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.

Singapore Telecommunicatio

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Telecommunications Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Singapore Telecommunicatio reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SUPERNOVA METALS and Singapore Telecommunicatio

The main advantage of trading using opposite SUPERNOVA METALS and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUPERNOVA METALS 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 SUPERNOVA METALS P 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.