Correlation Between Singapore Airlines and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Evolution Mining 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 Evolution Mining 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 Evolution Mining Limited, you can compare the effects of market volatilities on Singapore Airlines and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Evolution Mining.
Diversification Opportunities for Singapore Airlines and Evolution Mining
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Evolution is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Evolution Mining go up and down completely randomly.
Pair Corralation between Singapore Airlines and Evolution Mining
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.43 times more return on investment than Evolution Mining. However, Singapore Airlines Limited is 2.34 times less risky than Evolution Mining. It trades about 0.07 of its potential returns per unit of risk. Evolution Mining Limited is currently generating about -0.09 per unit of risk. If you would invest 448.00 in Singapore Airlines Limited on October 12, 2024 and sell it today you would earn a total of 4.00 from holding Singapore Airlines Limited or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Singapore Airlines Limited vs. Evolution Mining Limited
Performance |
| Timeline |
| Singapore Airlines |
| Evolution Mining |
Singapore Airlines and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Evolution Mining
The main advantage of trading using opposite Singapore Airlines and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.| Singapore Airlines vs. SOLSTAD OFFSHORE NK | Singapore Airlines vs. DELTA AIR LINES | Singapore Airlines vs. SBM OFFSHORE | Singapore Airlines vs. Wizz Air Holdings |
| Evolution Mining vs. DAIRY FARM INTL | Evolution Mining vs. Hitachi Construction Machinery | Evolution Mining vs. CSSC Offshore Marine | Evolution Mining vs. Aya Gold Silver |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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