Correlation Between SINGAPORE AIRLINES and Ally Financial
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and Ally 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 Ally 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 Ally Financial, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Ally 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 Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Ally Financial.
Diversification Opportunities for SINGAPORE AIRLINES and Ally Financial
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SINGAPORE and Ally is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial 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 Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Ally Financial go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Ally Financial
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.44 times more return on investment than Ally Financial. However, SINGAPORE AIRLINES is 2.25 times less risky than Ally Financial. It trades about -0.05 of its potential returns per unit of risk. Ally Financial is currently generating about -0.1 per unit of risk. If you would invest 452.00 in SINGAPORE AIRLINES on October 14, 2024 and sell it today you would lose (3.00) from holding SINGAPORE AIRLINES or give up 0.66% 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. Ally Financial
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Ally Financial |
SINGAPORE AIRLINES and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Ally Financial
The main advantage of trading using opposite SINGAPORE AIRLINES and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, Ally 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 Ally Financial will offset losses from the drop in Ally Financial's long position.| SINGAPORE AIRLINES vs. Playa Hotels Resorts | SINGAPORE AIRLINES vs. PLAYWAY SA ZY 10 | SINGAPORE AIRLINES vs. China BlueChemical | SINGAPORE AIRLINES vs. Playtech plc |
| Ally Financial vs. SINGAPORE AIRLINES | Ally Financial vs. Singapore Airlines Limited | Ally Financial vs. Q2M Managementberatung AG | Ally Financial vs. SOUTHWEST AIRLINES |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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