Correlation Between Singapore Reinsurance and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance 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 Singapore Reinsurance and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and SINGAPORE AIRLINES, you can compare the effects of market volatilities on Singapore Reinsurance 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 Singapore Reinsurance with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and SINGAPORE AIRLINES.
Diversification Opportunities for Singapore Reinsurance and SINGAPORE AIRLINES
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singapore and SINGAPORE is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and Singapore Reinsurance 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 Singapore Reinsurance 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 Singapore Reinsurance i.e., Singapore Reinsurance and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and SINGAPORE AIRLINES
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 2.12 times more return on investment than SINGAPORE AIRLINES. However, Singapore Reinsurance is 2.12 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 0.03 per unit of risk. If you would invest 3,480 in Singapore Reinsurance on October 30, 2024 and sell it today you would earn a total of 280.00 from holding Singapore Reinsurance or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Singapore Reinsurance |
| SINGAPORE AIRLINES |
Singapore Reinsurance and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and SINGAPORE AIRLINES
The main advantage of trading using opposite Singapore Reinsurance and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance 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.| Singapore Reinsurance vs. Singapore Telecommunications Limited | Singapore Reinsurance vs. SOGECLAIR SA INH | Singapore Reinsurance vs. Westinghouse Air Brake | Singapore Reinsurance vs. Pentair plc |
| SINGAPORE AIRLINES vs. Taiwan Semiconductor Manufacturing | SINGAPORE AIRLINES vs. PICKN PAY STORES | SINGAPORE AIRLINES vs. ON SEMICONDUCTOR | SINGAPORE AIRLINES vs. United Utilities Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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