Correlation Between SINGAPORE AIRLINES and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and ASSA ABLOY 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 ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and ASSA ABLOY AB, you can compare the effects of market volatilities on SINGAPORE AIRLINES and ASSA ABLOY 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 ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and ASSA ABLOY.
Diversification Opportunities for SINGAPORE AIRLINES and ASSA ABLOY
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SINGAPORE and ASSA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB 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 ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and ASSA ABLOY go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and ASSA ABLOY
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.54 times more return on investment than ASSA ABLOY. However, SINGAPORE AIRLINES is 1.85 times less risky than ASSA ABLOY. It trades about -0.11 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about -0.27 per unit of risk. If you would invest 448.00 in SINGAPORE AIRLINES on October 17, 2024 and sell it today you would lose (7.00) from holding SINGAPORE AIRLINES or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. ASSA ABLOY AB
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| ASSA ABLOY AB |
SINGAPORE AIRLINES and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and ASSA ABLOY
The main advantage of trading using opposite SINGAPORE AIRLINES and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, ASSA ABLOY 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 ASSA ABLOY will offset losses from the drop in ASSA ABLOY'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 |
| ASSA ABLOY vs. INSURANCE AUST GRP | ASSA ABLOY vs. SINGAPORE AIRLINES | ASSA ABLOY vs. Universal Insurance Holdings | ASSA ABLOY vs. Japan Post Insurance |
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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