Correlation Between Singapore Airlines and X Fab
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and X Fab 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 X Fab 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 X Fab Silicon, you can compare the effects of market volatilities on Singapore Airlines and X Fab 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 X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and X Fab.
Diversification Opportunities for Singapore Airlines and X Fab
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Singapore and XFB is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and X Fab go up and down completely randomly.
Pair Corralation between Singapore Airlines and X Fab
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.51 times more return on investment than X Fab. However, Singapore Airlines Limited is 1.96 times less risky than X Fab. It trades about 0.06 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.1 per unit of risk. If you would invest 402.00 in Singapore Airlines Limited on September 3, 2024 and sell it today you would earn a total of 40.00 from holding Singapore Airlines Limited or generate 9.95% 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. X Fab Silicon
Performance |
| Timeline |
| Singapore Airlines |
| X Fab Silicon |
Singapore Airlines and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and X Fab
The main advantage of trading using opposite Singapore Airlines and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, X Fab 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 X Fab will offset losses from the drop in X Fab's long position.| Singapore Airlines vs. Delta Air Lines | Singapore Airlines vs. AIR CHINA LTD | Singapore Airlines vs. RYANAIR HLDGS ADR | Singapore Airlines vs. Southwest Airlines Co |
| X Fab vs. Singapore Airlines Limited | X Fab vs. FANDIFI TECHNOLOGY P | X Fab vs. Microchip Technology Incorporated | X Fab vs. AECOM TECHNOLOGY |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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