Correlation Between CITY OFFICE and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE 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 CITY OFFICE and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITY OFFICE REIT and SINGAPORE AIRLINES, you can compare the effects of market volatilities on CITY OFFICE 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 CITY OFFICE with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and SINGAPORE AIRLINES.
Diversification Opportunities for CITY OFFICE and SINGAPORE AIRLINES
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CITY and SINGAPORE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and CITY OFFICE 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 CITY OFFICE REIT 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 CITY OFFICE i.e., CITY OFFICE and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between CITY OFFICE and SINGAPORE AIRLINES
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 3.4 times more return on investment than SINGAPORE AIRLINES. However, CITY OFFICE is 3.4 times more volatile than SINGAPORE AIRLINES. It trades about 0.26 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.04 per unit of risk. If you would invest 438.00 in CITY OFFICE REIT on September 3, 2024 and sell it today you would earn a total of 87.00 from holding CITY OFFICE REIT or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| CITY OFFICE REIT |
| SINGAPORE AIRLINES |
CITY OFFICE and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and SINGAPORE AIRLINES
The main advantage of trading using opposite CITY OFFICE and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE 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.| CITY OFFICE vs. Boston Properties | CITY OFFICE vs. COUSINS PTIES INC | CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 |
| SINGAPORE AIRLINES vs. REVO INSURANCE SPA | SINGAPORE AIRLINES vs. ALBIS LEASING AG | SINGAPORE AIRLINES vs. Evolution Mining Limited | SINGAPORE AIRLINES vs. PT Bank Maybank |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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