Correlation Between SINGAPORE AIRLINES and Meta Financial
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and Meta Financial 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 Meta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Meta Financial Group, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Meta Financial 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 Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Meta Financial.
Diversification Opportunities for SINGAPORE AIRLINES and Meta Financial
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SINGAPORE and Meta is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group 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 Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Meta Financial go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Meta Financial
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 2.1 times less return on investment than Meta Financial. But when comparing it to its historical volatility, SINGAPORE AIRLINES is 1.59 times less risky than Meta Financial. It trades about 0.05 of its potential returns per unit of risk. Meta Financial Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,147 in Meta Financial Group on October 17, 2024 and sell it today you would earn a total of 2,853 from holding Meta Financial Group or generate 68.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Meta Financial Group
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Meta Financial Group |
SINGAPORE AIRLINES and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Meta Financial
The main advantage of trading using opposite SINGAPORE AIRLINES and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, Meta Financial 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 Meta Financial will offset losses from the drop in Meta Financial'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 |
| Meta Financial vs. TITAN MACHINERY | Meta Financial vs. North American Construction | Meta Financial vs. SINGAPORE AIRLINES | Meta Financial vs. Granite Construction |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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