Correlation Between Singapore Airlines and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Singapore Airlines and ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and ORMAT TECHNOLOGIES.
Diversification Opportunities for Singapore Airlines and ORMAT TECHNOLOGIES
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Singapore and ORMAT is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORMAT TECHNOLOGIES has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Singapore Airlines and ORMAT TECHNOLOGIES
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.49 times more return on investment than ORMAT TECHNOLOGIES. However, Singapore Airlines Limited is 2.03 times less risky than ORMAT TECHNOLOGIES. It trades about 0.05 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.16 per unit of risk. If you would invest 447.00 in Singapore Airlines Limited on October 17, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Singapore Airlines |
| ORMAT TECHNOLOGIES |
Singapore Airlines and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Singapore Airlines and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES will offset losses from the drop in ORMAT TECHNOLOGIES's long position.| Singapore Airlines vs. CRISPR Therapeutics AG | Singapore Airlines vs. InterContinental Hotels Group | Singapore Airlines vs. Hyatt Hotels | Singapore Airlines vs. Singapore Telecommunications Limited |
| ORMAT TECHNOLOGIES vs. PLAYSTUDIOS A DL 0001 | ORMAT TECHNOLOGIES vs. ARISTOCRAT LEISURE | ORMAT TECHNOLOGIES vs. PLAYTECH | ORMAT TECHNOLOGIES vs. Singapore Airlines Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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