Correlation Between CosmoSteel Holdings and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings 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 CosmoSteel Holdings and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CosmoSteel Holdings Limited and Singapore Airlines Limited, you can compare the effects of market volatilities on CosmoSteel Holdings 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 CosmoSteel Holdings with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and Singapore Airlines.
Diversification Opportunities for CosmoSteel Holdings and Singapore Airlines
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CosmoSteel and Singapore is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and CosmoSteel Holdings 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 CosmoSteel Holdings Limited 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 CosmoSteel Holdings i.e., CosmoSteel Holdings and Singapore Airlines go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and Singapore Airlines
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to under-perform the Singapore Airlines. In addition to that, CosmoSteel Holdings is 1.58 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 419.00 in Singapore Airlines Limited on August 29, 2024 and sell it today you would earn a total of 29.00 from holding Singapore Airlines Limited or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. Singapore Airlines Limited
Performance |
| Timeline |
| CosmoSteel Holdings |
| Singapore Airlines |
CosmoSteel Holdings and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and Singapore Airlines
The main advantage of trading using opposite CosmoSteel Holdings and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings 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.| CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings | CosmoSteel Holdings vs. Origin Agritech | CosmoSteel Holdings vs. SIVERS SEMICONDUCTORS AB |
| Singapore Airlines vs. PennyMac Mortgage Investment | Singapore Airlines vs. CosmoSteel Holdings Limited | Singapore Airlines vs. Gladstone Investment | Singapore Airlines vs. Insteel Industries |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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