Correlation Between SINGAPORE AIRLINES and WW Grainger
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and WW Grainger 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 WW Grainger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and WW Grainger, you can compare the effects of market volatilities on SINGAPORE AIRLINES and WW Grainger 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 WW Grainger. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and WW Grainger.
Diversification Opportunities for SINGAPORE AIRLINES and WW Grainger
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SINGAPORE and GWW is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and WW Grainger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW Grainger 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 WW Grainger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW Grainger has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and WW Grainger go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and WW Grainger
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.56 times more return on investment than WW Grainger. However, SINGAPORE AIRLINES is 1.78 times less risky than WW Grainger. It trades about -0.11 of its potential returns per unit of risk. WW Grainger is currently generating about -0.46 per unit of risk. If you would invest 454.00 in SINGAPORE AIRLINES on October 11, 2024 and sell it today you would lose (5.00) from holding SINGAPORE AIRLINES or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. WW Grainger
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| WW Grainger |
SINGAPORE AIRLINES and WW Grainger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and WW Grainger
The main advantage of trading using opposite SINGAPORE AIRLINES and WW Grainger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, WW Grainger 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 WW Grainger will offset losses from the drop in WW Grainger's long position.| SINGAPORE AIRLINES vs. Titan Machinery | SINGAPORE AIRLINES vs. Nufarm Limited | SINGAPORE AIRLINES vs. Endeavour Mining PLC | SINGAPORE AIRLINES vs. WIMFARM SA EO |
| WW Grainger vs. International Consolidated Airlines | WW Grainger vs. Aristocrat Leisure Limited | WW Grainger vs. SINGAPORE AIRLINES | WW Grainger vs. Playa Hotels Resorts |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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