Correlation Between Perma Fix and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Perma Fix 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 Perma Fix and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perma Fix Environmental Services and Singapore Airlines Limited, you can compare the effects of market volatilities on Perma Fix 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 Perma Fix with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perma Fix and Singapore Airlines.
Diversification Opportunities for Perma Fix and Singapore Airlines
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Perma and Singapore is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Perma Fix 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 Perma Fix Environmental Services 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 Perma Fix i.e., Perma Fix and Singapore Airlines go up and down completely randomly.
Pair Corralation between Perma Fix and Singapore Airlines
Assuming the 90 days trading horizon Perma Fix Environmental Services is expected to generate 2.96 times more return on investment than Singapore Airlines. However, Perma Fix is 2.96 times more volatile than Singapore Airlines Limited. It trades about 0.05 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.06 per unit of risk. If you would invest 800.00 in Perma Fix Environmental Services on August 30, 2024 and sell it today you would earn a total of 620.00 from holding Perma Fix Environmental Services or generate 77.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perma Fix Environmental Servic vs. Singapore Airlines Limited
Performance |
| Timeline |
| Perma Fix Environmental |
| Singapore Airlines |
Perma Fix and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perma Fix and Singapore Airlines
The main advantage of trading using opposite Perma Fix and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perma Fix 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.| Perma Fix vs. Astral Foods Limited | Perma Fix vs. AEON STORES | Perma Fix vs. Costco Wholesale Corp | Perma Fix vs. Lifeway Foods |
| Singapore Airlines vs. Ryanair Holdings plc | Singapore Airlines vs. Superior Plus Corp | Singapore Airlines vs. NMI Holdings | Singapore Airlines vs. Origin Agritech |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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