Correlation Between GuocoLand and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both GuocoLand 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 GuocoLand and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GuocoLand Limited and Singapore Airlines Limited, you can compare the effects of market volatilities on GuocoLand 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 GuocoLand with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of GuocoLand and Singapore Airlines.
Diversification Opportunities for GuocoLand and Singapore Airlines
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GuocoLand and Singapore is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding GuocoLand 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 GuocoLand 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 GuocoLand 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 GuocoLand i.e., GuocoLand and Singapore Airlines go up and down completely randomly.
Pair Corralation between GuocoLand and Singapore Airlines
Assuming the 90 days trading horizon GuocoLand is expected to generate 1.01 times less return on investment than Singapore Airlines. But when comparing it to its historical volatility, GuocoLand Limited is 3.2 times less risky than Singapore Airlines. It trades about 0.06 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 413.00 in Singapore Airlines Limited on September 2, 2024 and sell it today you would earn a total of 29.00 from holding Singapore Airlines Limited or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GuocoLand Limited vs. Singapore Airlines Limited
Performance |
| Timeline |
| GuocoLand Limited |
| Singapore Airlines |
GuocoLand and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GuocoLand and Singapore Airlines
The main advantage of trading using opposite GuocoLand and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GuocoLand 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.| GuocoLand vs. ARROW ELECTRONICS | GuocoLand vs. Nucletron Electronic Aktiengesellschaft | GuocoLand vs. Computer And Technologies | GuocoLand vs. Meiko Electronics Co |
| Singapore Airlines vs. Southwest Airlines Co | Singapore Airlines vs. Superior Plus Corp | Singapore Airlines vs. NMI Holdings | Singapore Airlines vs. Origin Agritech |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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