Correlation Between Singapore Airlines and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Ballard Power 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 Ballard Power 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 Ballard Power Systems, you can compare the effects of market volatilities on Singapore Airlines and Ballard Power 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 Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Ballard Power.
Diversification Opportunities for Singapore Airlines and Ballard Power
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singapore and Ballard is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems 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 Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Ballard Power go up and down completely randomly.
Pair Corralation between Singapore Airlines and Ballard Power
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.15 times more return on investment than Ballard Power. However, Singapore Airlines Limited is 6.63 times less risky than Ballard Power. It trades about 0.0 of its potential returns per unit of risk. Ballard Power Systems is currently generating about 0.0 per unit of risk. If you would invest 445.00 in Singapore Airlines Limited on November 3, 2024 and sell it today you would lose (1.00) from holding Singapore Airlines Limited or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Singapore Airlines Limited vs. Ballard Power Systems
Performance |
| Timeline |
| Singapore Airlines |
| Ballard Power Systems |
Singapore Airlines and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Ballard Power
The main advantage of trading using opposite Singapore Airlines and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Singapore Airlines vs. Transport International Holdings | Singapore Airlines vs. East Africa Metals | Singapore Airlines vs. GOLD ROAD RES | Singapore Airlines vs. TRAINLINE PLC LS |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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