Correlation Between AIR PRODCHEMICALS and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Singapore Airlines Limited, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Singapore Airlines.
Diversification Opportunities for AIR PRODCHEMICALS and Singapore Airlines
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIR and Singapore is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Singapore Airlines go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Singapore Airlines
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 4.09 times less return on investment than Singapore Airlines. In addition to that, AIR PRODCHEMICALS is 1.17 times more volatile than Singapore Airlines Limited. It trades about 0.01 of its total potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.05 per unit of volatility. If you would invest 327.00 in Singapore Airlines Limited on September 28, 2024 and sell it today you would earn a total of 122.00 from holding Singapore Airlines Limited or generate 37.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Singapore Airlines Limited
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Singapore Airlines |
AIR PRODCHEMICALS and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Singapore Airlines
The main advantage of trading using opposite AIR PRODCHEMICALS and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Merit Medical Systems | AIR PRODCHEMICALS vs. CompuGroup Medical SE | AIR PRODCHEMICALS vs. SCANDMEDICAL SOLDK 040 | AIR PRODCHEMICALS vs. Shenandoah Telecommunications |
| Singapore Airlines vs. CHINA EDUCATION GROUP | Singapore Airlines vs. Xinhua Winshare Publishing | Singapore Airlines vs. Astral Foods Limited | Singapore Airlines vs. Tyson 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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