Correlation Between Singapore Airlines and ATT
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Singapore Airlines and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and ATT.
Diversification Opportunities for Singapore Airlines and ATT
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singapore and ATT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and ATT go up and down completely randomly.
Pair Corralation between Singapore Airlines and ATT
Assuming the 90 days trading horizon Singapore Airlines is expected to generate 5.38 times less return on investment than ATT. But when comparing it to its historical volatility, Singapore Airlines Limited is 1.06 times less risky than ATT. It trades about 0.02 of its potential returns per unit of risk. ATT Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,343 in ATT Inc on September 1, 2024 and sell it today you would earn a total of 855.00 from holding ATT Inc or generate 63.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Singapore Airlines Limited vs. ATT Inc
Performance |
| Timeline |
| Singapore Airlines |
| ATT Inc |
Singapore Airlines and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and ATT
The main advantage of trading using opposite Singapore Airlines and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Singapore Airlines vs. Southwest Airlines Co | Singapore Airlines vs. Superior Plus Corp | Singapore Airlines vs. NMI Holdings | Singapore Airlines vs. Origin Agritech |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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