Correlation Between Singapore Airlines and Cooper Standard
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Cooper Standard 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 Cooper Standard 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 Cooper Standard Holdings, you can compare the effects of market volatilities on Singapore Airlines and Cooper Standard 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 Cooper Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Cooper Standard.
Diversification Opportunities for Singapore Airlines and Cooper Standard
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Cooper is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Cooper Standard Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Standard Holdings 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 Cooper Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Standard Holdings has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Cooper Standard go up and down completely randomly.
Pair Corralation between Singapore Airlines and Cooper Standard
Assuming the 90 days trading horizon Singapore Airlines is expected to generate 1.02 times less return on investment than Cooper Standard. But when comparing it to its historical volatility, Singapore Airlines Limited is 3.33 times less risky than Cooper Standard. It trades about 0.06 of its potential returns per unit of risk. Cooper Standard Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Cooper Standard Holdings on November 28, 2024 and sell it today you would lose (150.00) from holding Cooper Standard Holdings or give up 9.74% 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. Cooper Standard Holdings
Performance |
| Timeline |
| Singapore Airlines |
| Cooper Standard Holdings |
Singapore Airlines and Cooper Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Cooper Standard
The main advantage of trading using opposite Singapore Airlines and Cooper Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Cooper Standard 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 Cooper Standard will offset losses from the drop in Cooper Standard's long position.| Singapore Airlines vs. Rocket Internet SE | Singapore Airlines vs. PennyMac Mortgage Investment | Singapore Airlines vs. Yunnan Water Investment | Singapore Airlines vs. REINET INVESTMENTS SCA |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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