Correlation Between Singapore Airlines and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on Singapore Airlines and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Clean Energy.
Diversification Opportunities for Singapore Airlines and Clean Energy
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and Clean is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Clean Energy go up and down completely randomly.
Pair Corralation between Singapore Airlines and Clean Energy
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.36 times more return on investment than Clean Energy. However, Singapore Airlines Limited is 2.75 times less risky than Clean Energy. It trades about 0.05 of its potential returns per unit of risk. Clean Energy Fuels is currently generating about -0.02 per unit of risk. If you would invest 319.00 in Singapore Airlines Limited on September 24, 2024 and sell it today you would earn a total of 126.00 from holding Singapore Airlines Limited or generate 39.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. Clean Energy Fuels
Performance |
| Timeline |
| Singapore Airlines |
| Clean Energy Fuels |
Singapore Airlines and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and Clean Energy
The main advantage of trading using opposite Singapore Airlines and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| Singapore Airlines vs. EAT WELL INVESTMENT | Singapore Airlines vs. Strategic Investments AS | Singapore Airlines vs. ECHO INVESTMENT ZY | Singapore Airlines vs. United Airlines Holdings |
| Clean Energy vs. Reliance Industries Limited | Clean Energy vs. Marathon Petroleum Corp | Clean Energy vs. Valero Energy | Clean Energy vs. NESTE OYJ UNSPADR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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