Correlation Between Insteel Industries and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Insteel Industries 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 Insteel Industries and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insteel Industries and Singapore Airlines Limited, you can compare the effects of market volatilities on Insteel Industries 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 Insteel Industries with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insteel Industries and Singapore Airlines.
Diversification Opportunities for Insteel Industries and Singapore Airlines
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insteel and Singapore is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Insteel Industries and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Insteel Industries 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 Insteel Industries 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 Insteel Industries i.e., Insteel Industries and Singapore Airlines go up and down completely randomly.
Pair Corralation between Insteel Industries and Singapore Airlines
Assuming the 90 days horizon Insteel Industries is expected to generate 2.06 times more return on investment than Singapore Airlines. However, Insteel Industries is 2.06 times more volatile than Singapore Airlines Limited. It trades about 0.29 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.02 per unit of risk. If you would invest 2,375 in Insteel Industries on September 1, 2024 and sell it today you would earn a total of 386.00 from holding Insteel Industries or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insteel Industries vs. Singapore Airlines Limited
Performance |
| Timeline |
| Insteel Industries |
| Singapore Airlines |
Insteel Industries and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insteel Industries and Singapore Airlines
The main advantage of trading using opposite Insteel Industries and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insteel Industries 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.| Insteel Industries vs. Wayside Technology Group | Insteel Industries vs. FANDIFI TECHNOLOGY P | Insteel Industries vs. WisdomTree Investments | Insteel Industries vs. MGIC INVESTMENT |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |