Correlation Between Peak Resources and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Peak Resources 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 Peak Resources and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peak Resources Limited and SINGAPORE AIRLINES, you can compare the effects of market volatilities on Peak Resources 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 Peak Resources with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and SINGAPORE AIRLINES.
Diversification Opportunities for Peak Resources and SINGAPORE AIRLINES
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Peak and SINGAPORE is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and Peak Resources 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 Peak Resources Limited 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 Peak Resources i.e., Peak Resources and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Peak Resources and SINGAPORE AIRLINES
Assuming the 90 days horizon Peak Resources Limited is expected to generate 11.75 times more return on investment than SINGAPORE AIRLINES. However, Peak Resources is 11.75 times more volatile than SINGAPORE AIRLINES. It trades about 0.1 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.3 per unit of risk. If you would invest 5.80 in Peak Resources Limited on September 12, 2024 and sell it today you would earn a total of 0.70 from holding Peak Resources Limited or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peak Resources Limited vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Peak Resources |
| SINGAPORE AIRLINES |
Peak Resources and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and SINGAPORE AIRLINES
The main advantage of trading using opposite Peak Resources and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources 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.| Peak Resources vs. NEWELL RUBBERMAID | Peak Resources vs. The Yokohama Rubber | Peak Resources vs. Hyster Yale Materials Handling | Peak Resources vs. Park Hotels Resorts |
| SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc |
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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