Correlation Between Singapore Airlines and Perusahaan Perseroan
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Perusahaan Perseroan 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 Perusahaan Perseroan 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 Perusahaan Perseroan PT, you can compare the effects of market volatilities on Singapore Airlines and Perusahaan Perseroan 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 Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Perusahaan Perseroan.
Diversification Opportunities for Singapore Airlines and Perusahaan Perseroan
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and Perusahaan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan 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 Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Perusahaan Perseroan go up and down completely randomly.
Pair Corralation between Singapore Airlines and Perusahaan Perseroan
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.67 times more return on investment than Perusahaan Perseroan. However, Singapore Airlines Limited is 1.49 times less risky than Perusahaan Perseroan. It trades about 0.03 of its potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about -0.03 per unit of risk. If you would invest 408.00 in Singapore Airlines Limited on October 16, 2024 and sell it today you would earn a total of 42.00 from holding Singapore Airlines Limited or generate 10.29% 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. Perusahaan Perseroan PT
Performance |
| Timeline |
| Singapore Airlines |
| Perusahaan Perseroan |
Singapore Airlines and Perusahaan Perseroan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Perusahaan Perseroan
The main advantage of trading using opposite Singapore Airlines and Perusahaan Perseroan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Perusahaan Perseroan 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 Perusahaan Perseroan will offset losses from the drop in Perusahaan Perseroan's long position.| Singapore Airlines vs. Gaztransport Technigaz SA | Singapore Airlines vs. COLUMBIA SPORTSWEAR | Singapore Airlines vs. COREBRIDGE FINANCIAL INC | Singapore Airlines vs. Transport International Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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