Correlation Between SINGAPORE AIRLINES and Dominion Energy
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and Dominion Energy 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 Dominion Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Dominion Energy, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Dominion Energy 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 Dominion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Dominion Energy.
Diversification Opportunities for SINGAPORE AIRLINES and Dominion Energy
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SINGAPORE and Dominion is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Dominion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Energy 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 Dominion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Energy has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Dominion Energy go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Dominion Energy
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 2.37 times less return on investment than Dominion Energy. But when comparing it to its historical volatility, SINGAPORE AIRLINES is 1.15 times less risky than Dominion Energy. It trades about 0.04 of its potential returns per unit of risk. Dominion Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,140 in Dominion Energy on September 2, 2024 and sell it today you would earn a total of 1,421 from holding Dominion Energy or generate 34.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Dominion Energy
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Dominion Energy |
SINGAPORE AIRLINES and Dominion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Dominion Energy
The main advantage of trading using opposite SINGAPORE AIRLINES and Dominion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, Dominion Energy 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 Dominion Energy will offset losses from the drop in Dominion Energy's long position.| SINGAPORE AIRLINES vs. SIVERS SEMICONDUCTORS AB | SINGAPORE AIRLINES vs. Darden Restaurants | SINGAPORE AIRLINES vs. Reliance Steel Aluminum | SINGAPORE AIRLINES vs. Q2M Managementberatung AG |
| Dominion Energy vs. TEXAS ROADHOUSE | Dominion Energy vs. United Airlines Holdings | Dominion Energy vs. SINGAPORE AIRLINES | Dominion Energy vs. BJs Restaurants |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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