Correlation Between Singapore Airlines and Littelfuse
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Littelfuse 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 Littelfuse 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 Littelfuse, you can compare the effects of market volatilities on Singapore Airlines and Littelfuse 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 Littelfuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Littelfuse.
Diversification Opportunities for Singapore Airlines and Littelfuse
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and Littelfuse is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Littelfuse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Littelfuse 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 Littelfuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Littelfuse has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Littelfuse go up and down completely randomly.
Pair Corralation between Singapore Airlines and Littelfuse
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.79 times more return on investment than Littelfuse. However, Singapore Airlines Limited is 1.26 times less risky than Littelfuse. It trades about 0.04 of its potential returns per unit of risk. Littelfuse is currently generating about 0.02 per unit of risk. If you would invest 392.00 in Singapore Airlines Limited on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Singapore Airlines Limited or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. Littelfuse
Performance |
| Timeline |
| Singapore Airlines |
| Littelfuse |
Singapore Airlines and Littelfuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Littelfuse
The main advantage of trading using opposite Singapore Airlines and Littelfuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Littelfuse 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 Littelfuse will offset losses from the drop in Littelfuse's long position.| Singapore Airlines vs. Superior Plus Corp | Singapore Airlines vs. NMI Holdings | Singapore Airlines vs. Origin Agritech | Singapore Airlines vs. SIVERS SEMICONDUCTORS AB |
| Littelfuse vs. Singapore Airlines Limited | Littelfuse vs. AUSNUTRIA DAIRY | Littelfuse vs. Lifeway Foods | Littelfuse vs. CN MODERN DAIRY |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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