Correlation Between Singapore Airlines and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Algonquin Power 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 Algonquin Power 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 Algonquin Power Utilities, you can compare the effects of market volatilities on Singapore Airlines and Algonquin Power 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 Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Algonquin Power.
Diversification Opportunities for Singapore Airlines and Algonquin Power
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Singapore and Algonquin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities 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 Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Algonquin Power go up and down completely randomly.
Pair Corralation between Singapore Airlines and Algonquin Power
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.52 times more return on investment than Algonquin Power. However, Singapore Airlines Limited is 1.93 times less risky than Algonquin Power. It trades about 0.21 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.17 per unit of risk. If you would invest 432.00 in Singapore Airlines Limited on September 19, 2024 and sell it today you would earn a total of 15.00 from holding Singapore Airlines Limited or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. Algonquin Power Utilities
Performance |
| Timeline |
| Singapore Airlines |
| Algonquin Power Utilities |
Singapore Airlines and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Algonquin Power
The main advantage of trading using opposite Singapore Airlines and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| Singapore Airlines vs. Chuangs China Investments | Singapore Airlines vs. DiamondRock Hospitality | Singapore Airlines vs. Natural Health Trends | Singapore Airlines vs. YOOMA WELLNESS INC |
| Algonquin Power vs. ABO GROUP ENVIRONMENT | Algonquin Power vs. Singapore Airlines Limited | Algonquin Power vs. AEGEAN AIRLINES | Algonquin Power vs. BLUESCOPE STEEL |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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