Correlation Between United Insurance and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both United Insurance 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 United Insurance and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Insurance Holdings and SINGAPORE AIRLINES, you can compare the effects of market volatilities on United Insurance 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 United Insurance with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and SINGAPORE AIRLINES.
Diversification Opportunities for United Insurance and SINGAPORE AIRLINES
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and SINGAPORE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and United Insurance 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 United Insurance Holdings 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 United Insurance i.e., United Insurance and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between United Insurance and SINGAPORE AIRLINES
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the SINGAPORE AIRLINES. In addition to that, United Insurance is 3.44 times more volatile than SINGAPORE AIRLINES. It trades about -0.05 of its total potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.03 per unit of volatility. If you would invest 440.00 in SINGAPORE AIRLINES on October 30, 2024 and sell it today you would earn a total of 3.00 from holding SINGAPORE AIRLINES or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| United Insurance Holdings |
| SINGAPORE AIRLINES |
United Insurance and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and SINGAPORE AIRLINES
The main advantage of trading using opposite United Insurance and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance 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.| United Insurance vs. TEN SQUARE GAMES | United Insurance vs. Major Drilling Group | United Insurance vs. GEAR4MUSIC LS 10 | United Insurance vs. Games Workshop Group |
| SINGAPORE AIRLINES vs. Taiwan Semiconductor Manufacturing | SINGAPORE AIRLINES vs. PICKN PAY STORES | SINGAPORE AIRLINES vs. ON SEMICONDUCTOR | SINGAPORE AIRLINES vs. United Utilities Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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