Correlation Between Singapore Airlines and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and THAI BEVERAGE 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 THAI BEVERAGE 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 THAI BEVERAGE, you can compare the effects of market volatilities on Singapore Airlines and THAI BEVERAGE 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 THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and THAI BEVERAGE.
Diversification Opportunities for Singapore Airlines and THAI BEVERAGE
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and THAI is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE 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 THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Singapore Airlines and THAI BEVERAGE
Assuming the 90 days trading horizon Singapore Airlines is expected to generate 2.27 times less return on investment than THAI BEVERAGE. But when comparing it to its historical volatility, Singapore Airlines Limited is 1.96 times less risky than THAI BEVERAGE. It trades about 0.09 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 36.00 in THAI BEVERAGE on August 31, 2024 and sell it today you would earn a total of 2.00 from holding THAI BEVERAGE or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. THAI BEVERAGE
Performance |
| Timeline |
| Singapore Airlines |
| THAI BEVERAGE |
Singapore Airlines and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and THAI BEVERAGE
The main advantage of trading using opposite Singapore Airlines and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, THAI BEVERAGE 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 THAI BEVERAGE will offset losses from the drop in THAI BEVERAGE's long position.| Singapore Airlines vs. RYANAIR HLDGS ADR | Singapore Airlines vs. Southwest Airlines Co | Singapore Airlines vs. Superior Plus Corp | Singapore Airlines vs. NMI Holdings |
| THAI BEVERAGE vs. SCOTT TECHNOLOGY | THAI BEVERAGE vs. X Fab Silicon | THAI BEVERAGE vs. Media and Games | THAI BEVERAGE vs. GAMING FAC SA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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