Correlation Between SPORTING and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and SINGAPORE AIRLINES, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and SINGAPORE AIRLINES.
Diversification Opportunities for SPORTING and SINGAPORE AIRLINES
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPORTING and SINGAPORE is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between SPORTING and SINGAPORE AIRLINES
Assuming the 90 days trading horizon SPORTING is expected to generate 0.88 times more return on investment than SINGAPORE AIRLINES. However, SPORTING is 1.13 times less risky than SINGAPORE AIRLINES. It trades about 0.13 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.06 per unit of risk. If you would invest 98.00 in SPORTING on September 12, 2024 and sell it today you would earn a total of 10.00 from holding SPORTING or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
SPORTING vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| SPORTING |
| SINGAPORE AIRLINES |
SPORTING and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and SINGAPORE AIRLINES
The main advantage of trading using opposite SPORTING and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.The idea behind SPORTING and SINGAPORE AIRLINES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SINGAPORE AIRLINES vs. Ramsay Health Care | SINGAPORE AIRLINES vs. FEMALE HEALTH | SINGAPORE AIRLINES vs. GUARDANT HEALTH CL | SINGAPORE AIRLINES vs. American Eagle Outfitters |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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