Correlation Between Singapore Airlines and ZANAGA IRON
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and ZANAGA IRON 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 ZANAGA IRON 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 ZANAGA IRON ORE, you can compare the effects of market volatilities on Singapore Airlines and ZANAGA IRON 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 ZANAGA IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and ZANAGA IRON.
Diversification Opportunities for Singapore Airlines and ZANAGA IRON
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and ZANAGA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and ZANAGA IRON ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZANAGA IRON ORE 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 ZANAGA IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZANAGA IRON ORE has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and ZANAGA IRON go up and down completely randomly.
Pair Corralation between Singapore Airlines and ZANAGA IRON
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.34 times more return on investment than ZANAGA IRON. However, Singapore Airlines Limited is 2.95 times less risky than ZANAGA IRON. It trades about 0.0 of its potential returns per unit of risk. ZANAGA IRON ORE is currently generating about -0.08 per unit of risk. If you would invest 449.00 in Singapore Airlines Limited on August 28, 2024 and sell it today you would lose (1.00) from holding Singapore Airlines Limited or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. ZANAGA IRON ORE
Performance |
| Timeline |
| Singapore Airlines |
| ZANAGA IRON ORE |
Singapore Airlines and ZANAGA IRON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and ZANAGA IRON
The main advantage of trading using opposite Singapore Airlines and ZANAGA IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, ZANAGA IRON 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 ZANAGA IRON will offset losses from the drop in ZANAGA IRON's long position.| Singapore Airlines vs. ANTA SPORTS PRODUCT | Singapore Airlines vs. Daido Steel Co | Singapore Airlines vs. BLUESCOPE STEEL | Singapore Airlines vs. Perma Fix Environmental Services |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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