Correlation Between Singapore Airlines and SOS
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and SOS 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 Airlines and SOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Airlines Limited and SOS LTD A, you can compare the effects of market volatilities on Singapore Airlines and SOS 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 Airlines with a short position of SOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and SOS.
Diversification Opportunities for Singapore Airlines and SOS
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Singapore and SOS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and SOS LTD A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOS LTD A and Singapore Airlines 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 Airlines Limited are associated (or correlated) with SOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOS LTD A has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and SOS go up and down completely randomly.
Pair Corralation between Singapore Airlines and SOS
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to under-perform the SOS. But the stock apears to be less risky and, when comparing its historical volatility, Singapore Airlines Limited is 4.79 times less risky than SOS. The stock trades about -0.11 of its potential returns per unit of risk. The SOS LTD A is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 700.00 in SOS LTD A on October 25, 2024 and sell it today you would earn a total of 10.00 from holding SOS LTD A or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 83.33% |
| Values | Daily Returns |
Singapore Airlines Limited vs. SOS LTD A
Performance |
| Timeline |
| Singapore Airlines |
| SOS LTD A |
Singapore Airlines and SOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and SOS
The main advantage of trading using opposite Singapore Airlines and SOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, SOS 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 SOS will offset losses from the drop in SOS's long position.| Singapore Airlines vs. Minerals Technologies | Singapore Airlines vs. Direct Line Insurance | Singapore Airlines vs. United Insurance Holdings | Singapore Airlines vs. Erste Group Bank |
| SOS vs. American Airlines Group | SOS vs. OURGAME INTHOLDL 00005 | SOS vs. Singapore Airlines Limited | SOS vs. SOUTHWEST AIRLINES |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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