Correlation Between WisdomTree Investments and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both WisdomTree Investments 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 WisdomTree Investments and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Investments and Singapore Airlines Limited, you can compare the effects of market volatilities on WisdomTree Investments 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 WisdomTree Investments with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Investments and Singapore Airlines.
Diversification Opportunities for WisdomTree Investments and Singapore Airlines
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between WisdomTree and Singapore is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Investments and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and WisdomTree Investments 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 WisdomTree Investments 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 WisdomTree Investments i.e., WisdomTree Investments and Singapore Airlines go up and down completely randomly.
Pair Corralation between WisdomTree Investments and Singapore Airlines
Assuming the 90 days horizon WisdomTree Investments is expected to under-perform the Singapore Airlines. In addition to that, WisdomTree Investments is 2.43 times more volatile than Singapore Airlines Limited. It trades about -0.3 of its total potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.01 per unit of volatility. If you would invest 451.00 in Singapore Airlines Limited on October 11, 2024 and sell it today you would lose (1.00) from holding Singapore Airlines Limited or give up 0.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 94.44% |
Values | Daily Returns |
WisdomTree Investments vs. Singapore Airlines Limited
Performance |
Timeline |
WisdomTree Investments |
Singapore Airlines |
WisdomTree Investments and Singapore Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WisdomTree Investments and Singapore Airlines
The main advantage of trading using opposite WisdomTree Investments and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Investments 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' long position.WisdomTree Investments vs. BANK OF CHINA | WisdomTree Investments vs. Virtu Financial | WisdomTree Investments vs. SYSTEMAIR AB | WisdomTree Investments vs. SOGECLAIR SA INH |
Singapore Airlines vs. JLF INVESTMENT | Singapore Airlines vs. Apollo Investment Corp | Singapore Airlines vs. SLR Investment Corp | Singapore Airlines vs. WisdomTree Investments |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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