Correlation Between Japan Airlines and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Japan Airlines 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 Airlines 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 Airlines Ltd and Singapore Airlines, you can compare the effects of market volatilities on Japan Airlines 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 Airlines with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Airlines and Singapore Airlines.
Diversification Opportunities for Japan Airlines and Singapore Airlines
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Japan and Singapore is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Japan Airlines Ltd and Singapore Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Japan Airlines 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 Airlines Ltd 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 Airlines i.e., Japan Airlines and Singapore Airlines go up and down completely randomly.
Pair Corralation between Japan Airlines and Singapore Airlines
If you would invest 412.00 in Singapore Airlines on August 25, 2024 and sell it today you would earn a total of 60.00 from holding Singapore Airlines or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.48% |
| Values | Daily Returns |
Japan Airlines Ltd vs. Singapore Airlines
Performance |
| Timeline |
| Japan Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Singapore Airlines |
Japan Airlines and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Airlines and Singapore Airlines
The main advantage of trading using opposite Japan Airlines and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Airlines 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.| Japan Airlines vs. Qantas Airways Limited | Japan Airlines vs. Cathay Pacific Airways | Japan Airlines vs. Singapore Airlines | Japan Airlines vs. Singapore Airlines |
| Singapore Airlines vs. Cathay Pacific Airways | Singapore Airlines vs. International Consolidated Airlines | Singapore Airlines vs. Air France KLM | Singapore Airlines vs. Qantas Airways Ltd |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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