Correlation Between SINGAPORE AIRLINES and Ring Energy
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and Ring Energy 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 Ring Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Ring Energy, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Ring Energy 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 Ring Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Ring Energy.
Diversification Opportunities for SINGAPORE AIRLINES and Ring Energy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SINGAPORE and Ring is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Ring Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ring Energy 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 Ring Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ring Energy has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Ring Energy go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Ring Energy
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.46 times more return on investment than Ring Energy. However, SINGAPORE AIRLINES is 2.17 times less risky than Ring Energy. It trades about 0.06 of its potential returns per unit of risk. Ring Energy is currently generating about -0.04 per unit of risk. If you would invest 433.00 in SINGAPORE AIRLINES on September 12, 2024 and sell it today you would earn a total of 21.00 from holding SINGAPORE AIRLINES or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Ring Energy
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Ring Energy |
SINGAPORE AIRLINES and Ring Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Ring Energy
The main advantage of trading using opposite SINGAPORE AIRLINES and Ring Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, Ring Energy 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 Ring Energy will offset losses from the drop in Ring Energy's long position.| SINGAPORE AIRLINES vs. Ramsay Health Care | SINGAPORE AIRLINES vs. FEMALE HEALTH | SINGAPORE AIRLINES vs. GUARDANT HEALTH CL | SINGAPORE AIRLINES vs. American Eagle Outfitters |
| Ring Energy vs. CPU SOFTWAREHOUSE | Ring Energy vs. The Yokohama Rubber | Ring Energy vs. EAGLE MATERIALS | Ring Energy vs. Magic Software Enterprises |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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