Correlation Between Singapore Airlines and PRECISION DRILLING
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and PRECISION DRILLING 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 PRECISION DRILLING 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 PRECISION DRILLING P, you can compare the effects of market volatilities on Singapore Airlines and PRECISION DRILLING 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 PRECISION DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and PRECISION DRILLING.
Diversification Opportunities for Singapore Airlines and PRECISION DRILLING
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singapore and PRECISION is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and PRECISION DRILLING P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRECISION DRILLING 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 PRECISION DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRECISION DRILLING has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and PRECISION DRILLING go up and down completely randomly.
Pair Corralation between Singapore Airlines and PRECISION DRILLING
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.49 times more return on investment than PRECISION DRILLING. However, Singapore Airlines Limited is 2.02 times less risky than PRECISION DRILLING. It trades about 0.08 of its potential returns per unit of risk. PRECISION DRILLING P is currently generating about 0.0 per unit of risk. If you would invest 399.00 in Singapore Airlines Limited on November 4, 2024 and sell it today you would earn a total of 45.00 from holding Singapore Airlines Limited or generate 11.28% 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. PRECISION DRILLING P
Performance |
| Timeline |
| Singapore Airlines |
| PRECISION DRILLING |
Singapore Airlines and PRECISION DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and PRECISION DRILLING
The main advantage of trading using opposite Singapore Airlines and PRECISION DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, PRECISION DRILLING 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 PRECISION DRILLING will offset losses from the drop in PRECISION DRILLING'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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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