Correlation Between Nippon Steel and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Nippon Steel 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 Nippon Steel and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Steel and SINGAPORE AIRLINES, you can compare the effects of market volatilities on Nippon Steel 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 Nippon Steel with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Steel and SINGAPORE AIRLINES.
Diversification Opportunities for Nippon Steel and SINGAPORE AIRLINES
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nippon and SINGAPORE is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Steel and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and Nippon Steel 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 Nippon Steel 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 Nippon Steel i.e., Nippon Steel and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Nippon Steel and SINGAPORE AIRLINES
Assuming the 90 days trading horizon Nippon Steel is expected to generate 1.42 times more return on investment than SINGAPORE AIRLINES. However, Nippon Steel is 1.42 times more volatile than SINGAPORE AIRLINES. It trades about 0.14 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.14 per unit of risk. If you would invest 1,823 in Nippon Steel on September 1, 2024 and sell it today you would earn a total of 88.00 from holding Nippon Steel or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nippon Steel vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Nippon Steel |
| SINGAPORE AIRLINES |
Nippon Steel and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Steel and SINGAPORE AIRLINES
The main advantage of trading using opposite Nippon Steel and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Steel 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.| Nippon Steel vs. COSMOSTEEL HLDGS | Nippon Steel vs. LEGACY IRON ORE | Nippon Steel vs. BlueScope Steel Limited | Nippon Steel vs. Daido Steel Co |
| SINGAPORE AIRLINES vs. MAGNUM MINING EXP | SINGAPORE AIRLINES vs. FIREWEED METALS P | SINGAPORE AIRLINES vs. Alfa Financial Software | SINGAPORE AIRLINES vs. Coeur Mining |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance |