Correlation Between INTERCONT HOTELS and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS 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 INTERCONT HOTELS and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and SINGAPORE AIRLINES, you can compare the effects of market volatilities on INTERCONT HOTELS 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 INTERCONT HOTELS with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and SINGAPORE AIRLINES.
Diversification Opportunities for INTERCONT HOTELS and SINGAPORE AIRLINES
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INTERCONT and SINGAPORE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and INTERCONT HOTELS 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 INTERCONT HOTELS 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 INTERCONT HOTELS i.e., INTERCONT HOTELS and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and SINGAPORE AIRLINES
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.28 times more return on investment than SINGAPORE AIRLINES. However, INTERCONT HOTELS is 1.28 times more volatile than SINGAPORE AIRLINES. It trades about 0.09 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.05 per unit of risk. If you would invest 5,998 in INTERCONT HOTELS on October 14, 2024 and sell it today you would earn a total of 5,602 from holding INTERCONT HOTELS or generate 93.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| INTERCONT HOTELS |
| SINGAPORE AIRLINES |
INTERCONT HOTELS and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and SINGAPORE AIRLINES
The main advantage of trading using opposite INTERCONT HOTELS and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS 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.| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
| SINGAPORE AIRLINES vs. HYATT HOTELS A | SINGAPORE AIRLINES vs. UPDATE SOFTWARE | SINGAPORE AIRLINES vs. OPERA SOFTWARE | SINGAPORE AIRLINES vs. INTERCONT HOTELS |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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