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SIMSCI futures a good hedging tool: SGX

It adds local stock market attuned to region's movements

Published Thu, Dec 26, 2013 · 10:00 PM

THE Singapore stock market is highly correlated to Asia-Pacific bourses and the MSCI Singapore Index (SIMSCI) futures serves as a portfolio hedging tool for market downturns, the Singapore Exchange (SGX) says in a report.

The exchange cited an analysis by index provider MSCI in November which shows that the correlation of Singapore to Asia-Pacific is 0.75, compared with 0.7 for Europe and world markets, and just under 0.6 for US markets.

Correlation measures how strongly two variables are related to each other, ranging between -1 and 1.

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