Correlation Between Guidewire Software and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Guidewire Software and SINGAPORE AIRLINES 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 Guidewire Software and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidewire Software and SINGAPORE AIRLINES, you can compare the effects of market volatilities on Guidewire Software and SINGAPORE AIRLINES 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 Guidewire Software with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidewire Software and SINGAPORE AIRLINES.
Diversification Opportunities for Guidewire Software and SINGAPORE AIRLINES
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guidewire and SINGAPORE is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Guidewire Software and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and Guidewire Software 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 Guidewire Software are associated (or correlated) with SINGAPORE AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE AIRLINES has no effect on the direction of Guidewire Software i.e., Guidewire Software and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Guidewire Software and SINGAPORE AIRLINES
Assuming the 90 days trading horizon Guidewire Software is expected to generate 1.82 times more return on investment than SINGAPORE AIRLINES. However, Guidewire Software is 1.82 times more volatile than SINGAPORE AIRLINES. It trades about 0.05 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.06 per unit of risk. If you would invest 15,265 in Guidewire Software on September 12, 2024 and sell it today you would earn a total of 870.00 from holding Guidewire Software or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidewire Software vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Guidewire Software |
| SINGAPORE AIRLINES |
Guidewire Software and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidewire Software and SINGAPORE AIRLINES
The main advantage of trading using opposite Guidewire Software and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidewire Software position performs unexpectedly, SINGAPORE AIRLINES 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 AIRLINES will offset losses from the drop in SINGAPORE AIRLINES's long position.| Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc |
| SINGAPORE AIRLINES vs. Ramsay Health Care | SINGAPORE AIRLINES vs. FEMALE HEALTH | SINGAPORE AIRLINES vs. GUARDANT HEALTH CL | SINGAPORE AIRLINES vs. American Eagle Outfitters |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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