Correlation Between Singapore Airlines and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Singapore Telecommunicatio 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 Singapore Telecommunicatio 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 Singapore Telecommunications Limited, you can compare the effects of market volatilities on Singapore Airlines and Singapore Telecommunicatio 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 Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Singapore Telecommunicatio.
Diversification Opportunities for Singapore Airlines and Singapore Telecommunicatio
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singapore and Singapore is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Singapore Airlines and Singapore Telecommunicatio
Assuming the 90 days trading horizon Singapore Airlines is expected to generate 1.16 times less return on investment than Singapore Telecommunicatio. But when comparing it to its historical volatility, Singapore Airlines Limited is 1.13 times less risky than Singapore Telecommunicatio. It trades about 0.04 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 166.00 in Singapore Telecommunications Limited on October 26, 2024 and sell it today you would earn a total of 54.00 from holding Singapore Telecommunications Limited or generate 32.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Singapore Airlines Limited vs. Singapore Telecommunications L
Performance |
| Timeline |
| Singapore Airlines |
| Singapore Telecommunicatio |
Singapore Airlines and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Singapore Telecommunicatio
The main advantage of trading using opposite Singapore Airlines and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Singapore Telecommunicatio 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 Singapore Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's long position.| Singapore Airlines vs. Elmos Semiconductor SE | Singapore Airlines vs. Nordic Semiconductor ASA | Singapore Airlines vs. MagnaChip Semiconductor Corp | Singapore Airlines vs. Nexstar Media Group |
| Singapore Telecommunicatio vs. T Mobile | Singapore Telecommunicatio vs. China Mobile Limited | Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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