Correlation Between Singapore Airlines and JAPAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and JAPAN AIRLINES 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 JAPAN AIRLINES 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 JAPAN AIRLINES, you can compare the effects of market volatilities on Singapore Airlines and JAPAN AIRLINES 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 JAPAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and JAPAN AIRLINES.
Diversification Opportunities for Singapore Airlines and JAPAN AIRLINES
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singapore and JAPAN is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and JAPAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN AIRLINES 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 JAPAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN AIRLINES has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and JAPAN AIRLINES go up and down completely randomly.
Pair Corralation between Singapore Airlines and JAPAN AIRLINES
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 1.04 times more return on investment than JAPAN AIRLINES. However, Singapore Airlines is 1.04 times more volatile than JAPAN AIRLINES. It trades about 0.05 of its potential returns per unit of risk. JAPAN AIRLINES is currently generating about -0.04 per unit of risk. If you would invest 377.00 in Singapore Airlines Limited on August 25, 2024 and sell it today you would earn a total of 73.00 from holding Singapore Airlines Limited or generate 19.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Singapore Airlines Limited vs. JAPAN AIRLINES
Performance |
| Timeline |
| Singapore Airlines |
| JAPAN AIRLINES |
Singapore Airlines and JAPAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and JAPAN AIRLINES
The main advantage of trading using opposite Singapore Airlines and JAPAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, JAPAN AIRLINES 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 JAPAN AIRLINES will offset losses from the drop in JAPAN AIRLINES's long position.| Singapore Airlines vs. Qurate Retail Series | Singapore Airlines vs. Ross Stores | Singapore Airlines vs. National Beverage Corp | Singapore Airlines vs. QURATE RETAIL INC |
| JAPAN AIRLINES vs. Apple Inc | JAPAN AIRLINES vs. Apple Inc | JAPAN AIRLINES vs. Apple Inc | JAPAN AIRLINES vs. Apple Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |