Correlation Between SINGAPORE AIRLINES and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and KAUFMAN ET 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 KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and KAUFMAN ET BROAD, you can compare the effects of market volatilities on SINGAPORE AIRLINES and KAUFMAN ET 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 KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and KAUFMAN ET.
Diversification Opportunities for SINGAPORE AIRLINES and KAUFMAN ET
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SINGAPORE and KAUFMAN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD 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 are associated (or correlated) with KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and KAUFMAN ET go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and KAUFMAN ET
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to under-perform the KAUFMAN ET. But the stock apears to be less risky and, when comparing its historical volatility, SINGAPORE AIRLINES is 1.7 times less risky than KAUFMAN ET. The stock trades about -0.01 of its potential returns per unit of risk. The KAUFMAN ET BROAD is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,155 in KAUFMAN ET BROAD on October 14, 2024 and sell it today you would earn a total of 55.00 from holding KAUFMAN ET BROAD or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| KAUFMAN ET BROAD |
SINGAPORE AIRLINES and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and KAUFMAN ET
The main advantage of trading using opposite SINGAPORE AIRLINES and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| SINGAPORE AIRLINES vs. HYATT HOTELS A | SINGAPORE AIRLINES vs. UPDATE SOFTWARE | SINGAPORE AIRLINES vs. OPERA SOFTWARE | SINGAPORE AIRLINES vs. INTERCONT HOTELS |
| KAUFMAN ET vs. SINGAPORE AIRLINES | KAUFMAN ET vs. Nok Airlines PCL | KAUFMAN ET vs. United Insurance Holdings | KAUFMAN ET vs. Southwest Airlines Co |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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