Correlation Between American Funds and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and Singapore Airlines, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Singapore Airlines.
Diversification Opportunities for American Funds and Singapore Airlines
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Singapore is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Singapore Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and American Funds 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 American Funds Fundamental 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 American Funds i.e., American Funds and Singapore Airlines go up and down completely randomly.
Pair Corralation between American Funds and Singapore Airlines
Assuming the 90 days horizon American Funds Fundamental is expected to generate 1.13 times more return on investment than Singapore Airlines. However, American Funds is 1.13 times more volatile than Singapore Airlines. It trades about 0.2 of its potential returns per unit of risk. Singapore Airlines is currently generating about -0.09 per unit of risk. If you would invest 8,096 in American Funds Fundamental on November 3, 2024 and sell it today you would earn a total of 322.00 from holding American Funds Fundamental or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. Singapore Airlines
Performance |
| Timeline |
| American Funds Funda |
| Singapore Airlines |
American Funds and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Singapore Airlines
The main advantage of trading using opposite American Funds and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Federated Emerging Market | American Funds vs. Siit Emerging Markets | American Funds vs. Mid Cap 15x Strategy | American Funds vs. Ashmore Emerging Markets |
| Singapore Airlines vs. Cathay Pacific Airways | Singapore Airlines vs. Qantas Airways Ltd | Singapore Airlines vs. International Consolidated Airlines | Singapore Airlines vs. Singapore Airlines |
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 Stocks Directory module to find actively traded stocks across global markets.
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