Correlation Between SINGAPORE AIRLINES and Peak Resources
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and Peak Resources 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 Peak Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Peak Resources Limited, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Peak Resources.
Diversification Opportunities for SINGAPORE AIRLINES and Peak Resources
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SINGAPORE and Peak is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Peak Resources go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Peak Resources
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.15 times more return on investment than Peak Resources. However, SINGAPORE AIRLINES is 6.45 times less risky than Peak Resources. It trades about 0.06 of its potential returns per unit of risk. Peak Resources Limited is currently generating about -0.02 per unit of risk. If you would invest 371.00 in SINGAPORE AIRLINES on September 15, 2024 and sell it today you would earn a total of 78.00 from holding SINGAPORE AIRLINES or generate 21.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Peak Resources Limited
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Peak Resources |
SINGAPORE AIRLINES and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Peak Resources
The main advantage of trading using opposite SINGAPORE AIRLINES and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' long position.| SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc |
| Peak Resources vs. SINGAPORE AIRLINES | Peak Resources vs. National Beverage Corp | Peak Resources vs. BOSTON BEER A | Peak Resources vs. Ramsay Health Care |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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