Correlation Between New Residential and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both New Residential 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 New Residential and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Residential Investment and SINGAPORE AIRLINES, you can compare the effects of market volatilities on New Residential 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 New Residential with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and SINGAPORE AIRLINES.
Diversification Opportunities for New Residential and SINGAPORE AIRLINES
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and SINGAPORE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and New Residential 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 New Residential Investment 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 New Residential i.e., New Residential and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between New Residential and SINGAPORE AIRLINES
Assuming the 90 days trading horizon New Residential Investment is expected to generate 1.03 times more return on investment than SINGAPORE AIRLINES. However, New Residential is 1.03 times more volatile than SINGAPORE AIRLINES. It trades about 0.07 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.05 per unit of risk. If you would invest 716.00 in New Residential Investment on November 5, 2024 and sell it today you would earn a total of 393.00 from holding New Residential Investment or generate 54.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| New Residential Inve |
| SINGAPORE AIRLINES |
New Residential and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and SINGAPORE AIRLINES
The main advantage of trading using opposite New Residential and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential 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.| New Residential vs. Commonwealth Bank of | New Residential vs. Bio Techne Corp | New Residential vs. Sunny Optical Technology | New Residential vs. VELA TECHNOLPLC LS 0001 |
| SINGAPORE AIRLINES vs. Solstad Offshore ASA | SINGAPORE AIRLINES vs. Cal Maine Foods | SINGAPORE AIRLINES vs. Taiwan Semiconductor Manufacturing | SINGAPORE AIRLINES vs. Cal Maine Foods |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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