Correlation Between Singapore Airlines and Sun Life
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on Singapore Airlines and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Sun Life.
Diversification Opportunities for Singapore Airlines and Sun Life
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Sun is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Sun Life go up and down completely randomly.
Pair Corralation between Singapore Airlines and Sun Life
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.9 times more return on investment than Sun Life. However, Singapore Airlines Limited is 1.12 times less risky than Sun Life. It trades about 0.28 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.11 per unit of risk. If you would invest 425.00 in Singapore Airlines Limited on September 14, 2024 and sell it today you would earn a total of 23.00 from holding Singapore Airlines Limited or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. Sun Life Financial
Performance |
| Timeline |
| Singapore Airlines |
| Sun Life Financial |
Singapore Airlines and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Sun Life
The main advantage of trading using opposite Singapore Airlines and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Singapore Airlines vs. RYANAIR HLDGS ADR | Singapore Airlines vs. Ryanair Holdings plc | Singapore Airlines vs. Superior Plus Corp | Singapore Airlines vs. SIVERS SEMICONDUCTORS AB |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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