Correlation Between Apple and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SINGAPORE AIRLINES, you can compare the effects of market volatilities on Apple 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 Apple with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SINGAPORE AIRLINES.
Diversification Opportunities for Apple and SINGAPORE AIRLINES
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and SINGAPORE is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and Apple 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 Apple Inc 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 Apple i.e., Apple and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Apple and SINGAPORE AIRLINES
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the SINGAPORE AIRLINES. In addition to that, Apple is 2.54 times more volatile than SINGAPORE AIRLINES. It trades about -0.15 of its total potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about -0.07 per unit of volatility. If you would invest 454.00 in SINGAPORE AIRLINES on November 6, 2024 and sell it today you would lose (6.00) from holding SINGAPORE AIRLINES or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Apple Inc |
| SINGAPORE AIRLINES |
Apple and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SINGAPORE AIRLINES
The main advantage of trading using opposite Apple and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. DELTA AIR LINES | Apple vs. Ryanair Holdings plc | Apple vs. Lendlease Group | Apple vs. ALBIS LEASING AG |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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