Correlation Between SINGAPORE AIRLINES and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on SINGAPORE AIRLINES and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and EIDESVIK OFFSHORE.
Diversification Opportunities for SINGAPORE AIRLINES and EIDESVIK OFFSHORE
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SINGAPORE and EIDESVIK is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and EIDESVIK OFFSHORE
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to under-perform the EIDESVIK OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, SINGAPORE AIRLINES is 1.23 times less risky than EIDESVIK OFFSHORE. The stock trades about -0.18 of its potential returns per unit of risk. The EIDESVIK OFFSHORE NK is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 111.00 in EIDESVIK OFFSHORE NK on August 28, 2024 and sell it today you would earn a total of 1.00 from holding EIDESVIK OFFSHORE NK or generate 0.9% 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. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| EIDESVIK OFFSHORE |
SINGAPORE AIRLINES and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and EIDESVIK OFFSHORE
The main advantage of trading using opposite SINGAPORE AIRLINES and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE will offset losses from the drop in EIDESVIK OFFSHORE's long position.| SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Microsoft |
| EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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