Correlation Between Singapore Airlines and SPORT LISBOA
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and SPORT LISBOA 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 SPORT LISBOA 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 SPORT LISBOA E, you can compare the effects of market volatilities on Singapore Airlines and SPORT LISBOA 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 SPORT LISBOA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and SPORT LISBOA.
Diversification Opportunities for Singapore Airlines and SPORT LISBOA
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and SPORT is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and SPORT LISBOA E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORT LISBOA E 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 SPORT LISBOA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORT LISBOA E has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and SPORT LISBOA go up and down completely randomly.
Pair Corralation between Singapore Airlines and SPORT LISBOA
Assuming the 90 days trading horizon Singapore Airlines is expected to generate 2.91 times less return on investment than SPORT LISBOA. But when comparing it to its historical volatility, Singapore Airlines Limited is 1.94 times less risky than SPORT LISBOA. It trades about 0.09 of its potential returns per unit of risk. SPORT LISBOA E is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 314.00 in SPORT LISBOA E on September 5, 2024 and sell it today you would earn a total of 19.00 from holding SPORT LISBOA E or generate 6.05% 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. SPORT LISBOA E
Performance |
| Timeline |
| Singapore Airlines |
| SPORT LISBOA E |
Singapore Airlines and SPORT LISBOA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and SPORT LISBOA
The main advantage of trading using opposite Singapore Airlines and SPORT LISBOA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, SPORT LISBOA 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 SPORT LISBOA will offset losses from the drop in SPORT LISBOA's long position.| Singapore Airlines vs. Delta Air Lines | Singapore Airlines vs. AIR CHINA LTD | Singapore Airlines vs. RYANAIR HLDGS ADR | Singapore Airlines vs. China Southern Airlines |
| SPORT LISBOA vs. G8 EDUCATION | SPORT LISBOA vs. Strategic Education | SPORT LISBOA vs. IDP EDUCATION LTD | SPORT LISBOA vs. American Public Education |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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