Correlation Between Big 5 and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Big 5 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 Big 5 and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big 5 Sporting and SINGAPORE AIRLINES, you can compare the effects of market volatilities on Big 5 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 Big 5 with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big 5 and SINGAPORE AIRLINES.
Diversification Opportunities for Big 5 and SINGAPORE AIRLINES
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Big and SINGAPORE is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Big 5 Sporting and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and Big 5 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 Big 5 Sporting 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 Big 5 i.e., Big 5 and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Big 5 and SINGAPORE AIRLINES
Assuming the 90 days horizon Big 5 is expected to generate 6.74 times less return on investment than SINGAPORE AIRLINES. In addition to that, Big 5 is 2.98 times more volatile than SINGAPORE AIRLINES. It trades about 0.0 of its total potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.03 per unit of volatility. If you would invest 438.00 in SINGAPORE AIRLINES on September 13, 2024 and sell it today you would earn a total of 10.00 from holding SINGAPORE AIRLINES or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big 5 Sporting vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Big 5 Sporting |
| SINGAPORE AIRLINES |
Big 5 and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big 5 and SINGAPORE AIRLINES
The main advantage of trading using opposite Big 5 and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big 5 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.| Big 5 vs. Superior Plus Corp | Big 5 vs. SIVERS SEMICONDUCTORS AB | Big 5 vs. NorAm Drilling AS | Big 5 vs. Norsk Hydro ASA |
| SINGAPORE AIRLINES vs. Ramsay Health Care | SINGAPORE AIRLINES vs. FEMALE HEALTH | SINGAPORE AIRLINES vs. GUARDANT HEALTH CL | SINGAPORE AIRLINES vs. American Eagle Outfitters |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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