Correlation Between Singapore Airlines and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Air Liquide 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 Air Liquide 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 Air Liquide SA, you can compare the effects of market volatilities on Singapore Airlines and Air Liquide 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 Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Air Liquide.
Diversification Opportunities for Singapore Airlines and Air Liquide
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Singapore and Air is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA 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 Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Air Liquide go up and down completely randomly.
Pair Corralation between Singapore Airlines and Air Liquide
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.89 times more return on investment than Air Liquide. However, Singapore Airlines Limited is 1.12 times less risky than Air Liquide. It trades about 0.05 of its potential returns per unit of risk. Air Liquide SA is currently generating about -0.11 per unit of risk. If you would invest 447.00 in Singapore Airlines Limited on October 16, 2024 and sell it today you would earn a total of 3.00 from holding Singapore Airlines Limited or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. Air Liquide SA
Performance |
| Timeline |
| Singapore Airlines |
| Air Liquide SA |
Singapore Airlines and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Air Liquide
The main advantage of trading using opposite Singapore Airlines and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Air Liquide 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 Air Liquide will offset losses from the drop in Air Liquide's long position.| Singapore Airlines vs. ALGOMA STEEL GROUP | Singapore Airlines vs. CeoTronics AG | Singapore Airlines vs. Sims Metal Management | Singapore Airlines vs. COSMOSTEEL HLDGS |
| Air Liquide vs. Dupont De Nemours | Air Liquide vs. LyondellBasell Industries NV | Air Liquide vs. PPG Industries |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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