Correlation Between Singapore Airlines and MUENCHRUECKUNSADR
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and MUENCHRUECKUNSADR 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 MUENCHRUECKUNSADR 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 MUENCHRUECKUNSADR 110, you can compare the effects of market volatilities on Singapore Airlines and MUENCHRUECKUNSADR 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 MUENCHRUECKUNSADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and MUENCHRUECKUNSADR.
Diversification Opportunities for Singapore Airlines and MUENCHRUECKUNSADR
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and MUENCHRUECKUNSADR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and MUENCHRUECKUNSADR 110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUENCHRUECKUNSADR 110 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 MUENCHRUECKUNSADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUENCHRUECKUNSADR 110 has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and MUENCHRUECKUNSADR go up and down completely randomly.
Pair Corralation between Singapore Airlines and MUENCHRUECKUNSADR
Assuming the 90 days trading horizon Singapore Airlines is expected to generate 5.39 times less return on investment than MUENCHRUECKUNSADR. But when comparing it to its historical volatility, Singapore Airlines Limited is 1.94 times less risky than MUENCHRUECKUNSADR. It trades about 0.07 of its potential returns per unit of risk. MUENCHRUECKUNSADR 110 is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 925.00 in MUENCHRUECKUNSADR 110 on September 4, 2024 and sell it today you would earn a total of 85.00 from holding MUENCHRUECKUNSADR 110 or generate 9.19% 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. MUENCHRUECKUNSADR 110
Performance |
| Timeline |
| Singapore Airlines |
| MUENCHRUECKUNSADR 110 |
Singapore Airlines and MUENCHRUECKUNSADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and MUENCHRUECKUNSADR
The main advantage of trading using opposite Singapore Airlines and MUENCHRUECKUNSADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, MUENCHRUECKUNSADR 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 MUENCHRUECKUNSADR will offset losses from the drop in MUENCHRUECKUNSADR's long position.| Singapore Airlines vs. Delta Air Lines | Singapore Airlines vs. AIR CHINA LTD | Singapore Airlines vs. RYANAIR HLDGS ADR | Singapore Airlines vs. Southwest Airlines Co |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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