Correlation Between Global Ship and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Singapore Airlines Limited, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Singapore Airlines.
Diversification Opportunities for Global Ship and Singapore Airlines
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Singapore is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and Singapore Airlines go up and down completely randomly.
Pair Corralation between Global Ship and Singapore Airlines
Assuming the 90 days horizon Global Ship Lease is expected to generate 2.79 times more return on investment than Singapore Airlines. However, Global Ship is 2.79 times more volatile than Singapore Airlines Limited. It trades about 0.06 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.01 per unit of risk. If you would invest 2,080 in Global Ship Lease on October 11, 2024 and sell it today you would earn a total of 44.00 from holding Global Ship Lease or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Global Ship Lease vs. Singapore Airlines Limited
Performance |
| Timeline |
| Global Ship Lease |
| Singapore Airlines |
Global Ship and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Singapore Airlines
The main advantage of trading using opposite Global Ship and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. CEOTRONICS | Global Ship vs. Coor Service Management | Global Ship vs. Pure Storage | Global Ship vs. LANDSEA GREEN MANAGEMENT |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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