Correlation Between Singapore Airlines and MAGNA INTL
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and MAGNA INTL 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 MAGNA INTL 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 MAGNA INTL, you can compare the effects of market volatilities on Singapore Airlines and MAGNA INTL 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 MAGNA INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and MAGNA INTL.
Diversification Opportunities for Singapore Airlines and MAGNA INTL
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and MAGNA is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and MAGNA INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNA INTL 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 MAGNA INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNA INTL has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and MAGNA INTL go up and down completely randomly.
Pair Corralation between Singapore Airlines and MAGNA INTL
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.72 times more return on investment than MAGNA INTL. However, Singapore Airlines Limited is 1.39 times less risky than MAGNA INTL. It trades about 0.03 of its potential returns per unit of risk. MAGNA INTL is currently generating about -0.02 per unit of risk. If you would invest 408.00 in Singapore Airlines Limited on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Singapore Airlines Limited or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Singapore Airlines Limited vs. MAGNA INTL
Performance |
| Timeline |
| Singapore Airlines |
| MAGNA INTL |
Singapore Airlines and MAGNA INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and MAGNA INTL
The main advantage of trading using opposite Singapore Airlines and MAGNA INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, MAGNA INTL 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 MAGNA INTL will offset losses from the drop in MAGNA INTL'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 |
| MAGNA INTL vs. Singapore Airlines Limited | MAGNA INTL vs. BE Semiconductor Industries | MAGNA INTL vs. Perseus Mining Limited | MAGNA INTL vs. Evolution Mining 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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