Correlation Between SINGAPORE AIRLINES and INTER CARS
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and INTER CARS 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 INTER CARS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and INTER CARS SA, you can compare the effects of market volatilities on SINGAPORE AIRLINES and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and INTER CARS.
Diversification Opportunities for SINGAPORE AIRLINES and INTER CARS
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SINGAPORE and INTER is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and INTER CARS go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and INTER CARS
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to under-perform the INTER CARS. But the stock apears to be less risky and, when comparing its historical volatility, SINGAPORE AIRLINES is 2.29 times less risky than INTER CARS. The stock trades about -0.07 of its potential returns per unit of risk. The INTER CARS SA is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 11,880 in INTER CARS SA on November 2, 2024 and sell it today you would earn a total of 1,280 from holding INTER CARS SA or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. INTER CARS SA
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| INTER CARS SA |
SINGAPORE AIRLINES and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and INTER CARS
The main advantage of trading using opposite SINGAPORE AIRLINES and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| SINGAPORE AIRLINES vs. PURE FOODS TASMANIA | SINGAPORE AIRLINES vs. TRADEDOUBLER AB SK | SINGAPORE AIRLINES vs. US FOODS HOLDING | SINGAPORE AIRLINES vs. Canon Marketing Japan |
| INTER CARS vs. Cardinal Health | INTER CARS vs. National Health Investors | INTER CARS vs. Chunghwa Telecom Co | INTER CARS vs. HEALTHSTREAM |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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