Correlation Between Liberty Media and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Liberty Media 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 Liberty Media and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Singapore Airlines, you can compare the effects of market volatilities on Liberty Media 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 Liberty Media with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Singapore Airlines.
Diversification Opportunities for Liberty Media and Singapore Airlines
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liberty and Singapore is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Singapore Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Liberty Media 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 Liberty Media 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 Liberty Media i.e., Liberty Media and Singapore Airlines go up and down completely randomly.
Pair Corralation between Liberty Media and Singapore Airlines
Assuming the 90 days horizon Liberty Media is expected to generate 8.62 times more return on investment than Singapore Airlines. However, Liberty Media is 8.62 times more volatile than Singapore Airlines. It trades about 0.06 of its potential returns per unit of risk. Singapore Airlines is currently generating about 0.01 per unit of risk. If you would invest 590.00 in Liberty Media on September 1, 2024 and sell it today you would earn a total of 6,712 from holding Liberty Media or generate 1137.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.26% |
| Values | Daily Returns |
Liberty Media vs. Singapore Airlines
Performance |
| Timeline |
| Liberty Media |
| Singapore Airlines |
Liberty Media and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Singapore Airlines
The main advantage of trading using opposite Liberty Media and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media 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.| Liberty Media vs. Stepstone Group | Liberty Media vs. Morgan Stanley | Liberty Media vs. SEI Investments | Liberty Media vs. Artisan Partners Asset |
| Singapore Airlines vs. Copa Holdings SA | Singapore Airlines vs. United Airlines Holdings | Singapore Airlines vs. Delta Air Lines | Singapore Airlines vs. SkyWest |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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