Correlation Between SINGAPORE AIRLINES and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and Gaztransport Technigaz 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 Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Gaztransport Technigaz SA, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Gaztransport Technigaz.
Diversification Opportunities for SINGAPORE AIRLINES and Gaztransport Technigaz
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SINGAPORE and Gaztransport is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Gaztransport Technigaz
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to under-perform the Gaztransport Technigaz. But the stock apears to be less risky and, when comparing its historical volatility, SINGAPORE AIRLINES is 2.92 times less risky than Gaztransport Technigaz. The stock trades about -0.05 of its potential returns per unit of risk. The Gaztransport Technigaz SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13,170 in Gaztransport Technigaz SA on October 17, 2024 and sell it today you would earn a total of 490.00 from holding Gaztransport Technigaz SA or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Gaztransport Technigaz |
SINGAPORE AIRLINES and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Gaztransport Technigaz
The main advantage of trading using opposite SINGAPORE AIRLINES and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| SINGAPORE AIRLINES vs. FLOW TRADERS LTD | SINGAPORE AIRLINES vs. The Trade Desk | SINGAPORE AIRLINES vs. ASPEN TECHINC DL | SINGAPORE AIRLINES vs. Treasury Wine Estates |
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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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