Correlation Between SINGAPORE AIRLINES and REVO INSURANCE
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and REVO INSURANCE 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 REVO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and REVO INSURANCE SPA, you can compare the effects of market volatilities on SINGAPORE AIRLINES and REVO INSURANCE 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 REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and REVO INSURANCE.
Diversification Opportunities for SINGAPORE AIRLINES and REVO INSURANCE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SINGAPORE and REVO is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA 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 REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and REVO INSURANCE go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and REVO INSURANCE
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.21 times more return on investment than REVO INSURANCE. However, SINGAPORE AIRLINES is 4.77 times less risky than REVO INSURANCE. It trades about 0.05 of its potential returns per unit of risk. REVO INSURANCE SPA is currently generating about -0.03 per unit of risk. If you would invest 447.00 in SINGAPORE AIRLINES on October 20, 2024 and sell it today you would earn a total of 3.00 from holding SINGAPORE AIRLINES or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. REVO INSURANCE SPA
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| REVO INSURANCE SPA |
SINGAPORE AIRLINES and REVO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and REVO INSURANCE
The main advantage of trading using opposite SINGAPORE AIRLINES and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, REVO INSURANCE 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.| SINGAPORE AIRLINES vs. Benchmark Electronics | SINGAPORE AIRLINES vs. Electronic Arts | SINGAPORE AIRLINES vs. ATRESMEDIA | SINGAPORE AIRLINES vs. Arrow Electronics |
| REVO INSURANCE vs. ASURE SOFTWARE | REVO INSURANCE vs. International Consolidated Airlines | REVO INSURANCE vs. SINGAPORE AIRLINES | REVO INSURANCE vs. Nok Airlines PCL |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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