Correlation Between Japan Asia and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and SINGAPORE AIRLINES, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and SINGAPORE AIRLINES.
Diversification Opportunities for Japan Asia and SINGAPORE AIRLINES
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and SINGAPORE is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Japan Asia and SINGAPORE AIRLINES
Assuming the 90 days horizon Japan Asia is expected to generate 7.2 times less return on investment than SINGAPORE AIRLINES. In addition to that, Japan Asia is 2.49 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 0.05 per unit of volatility. If you would invest 338.00 in SINGAPORE AIRLINES on November 5, 2024 and sell it today you would earn a total of 110.00 from holding SINGAPORE AIRLINES or generate 32.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Japan Asia Investment |
| SINGAPORE AIRLINES |
Japan Asia and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and SINGAPORE AIRLINES
The main advantage of trading using opposite Japan Asia and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. GAMES OPERATORS SA | Japan Asia vs. Scientific Games | Japan Asia vs. CORNISH METALS INC | Japan Asia vs. PLAYMATES TOYS |
| SINGAPORE AIRLINES vs. Solstad Offshore ASA | SINGAPORE AIRLINES vs. Cal Maine Foods | SINGAPORE AIRLINES vs. Taiwan Semiconductor Manufacturing | SINGAPORE AIRLINES vs. Cal Maine Foods |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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