Correlation Between Singapore Airlines and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and UNITED RENTALS 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 UNITED RENTALS 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 UNITED RENTALS, you can compare the effects of market volatilities on Singapore Airlines and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and UNITED RENTALS.
Diversification Opportunities for Singapore Airlines and UNITED RENTALS
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Singapore and UNITED is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Singapore Airlines and UNITED RENTALS
Assuming the 90 days trading horizon Singapore Airlines is expected to generate 4.26 times less return on investment than UNITED RENTALS. But when comparing it to its historical volatility, Singapore Airlines Limited is 1.69 times less risky than UNITED RENTALS. It trades about 0.07 of its potential returns per unit of risk. UNITED RENTALS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 74,970 in UNITED RENTALS on August 29, 2024 and sell it today you would earn a total of 7,050 from holding UNITED RENTALS or generate 9.4% 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. UNITED RENTALS
Performance |
| Timeline |
| Singapore Airlines |
| UNITED RENTALS |
Singapore Airlines and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and UNITED RENTALS
The main advantage of trading using opposite Singapore Airlines and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS's long position.| Singapore Airlines vs. PennyMac Mortgage Investment | Singapore Airlines vs. CosmoSteel Holdings Limited | Singapore Airlines vs. Gladstone Investment | Singapore Airlines vs. Insteel Industries |
| UNITED RENTALS vs. Laureate Education | UNITED RENTALS vs. Darden Restaurants | UNITED RENTALS vs. MEDICAL FACILITIES NEW | UNITED RENTALS vs. ScanSource |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |