Correlation Between SINGAPORE AIRLINES and Mitie Group
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and Mitie Group 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 Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Mitie Group PLC, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Mitie Group 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 Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Mitie Group.
Diversification Opportunities for SINGAPORE AIRLINES and Mitie Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SINGAPORE and Mitie is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Mitie Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie Group PLC 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 Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group PLC has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Mitie Group go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Mitie Group
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.35 times more return on investment than Mitie Group. However, SINGAPORE AIRLINES is 2.83 times less risky than Mitie Group. It trades about 0.04 of its potential returns per unit of risk. Mitie Group PLC is currently generating about -0.06 per unit of risk. If you would invest 437.00 in SINGAPORE AIRLINES on September 3, 2024 and sell it today you would earn a total of 3.00 from holding SINGAPORE AIRLINES or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Mitie Group PLC
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Mitie Group PLC |
SINGAPORE AIRLINES and Mitie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Mitie Group
The main advantage of trading using opposite SINGAPORE AIRLINES and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, Mitie Group 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 Mitie Group will offset losses from the drop in Mitie Group's long position.| SINGAPORE AIRLINES vs. REVO INSURANCE SPA | SINGAPORE AIRLINES vs. ALBIS LEASING AG | SINGAPORE AIRLINES vs. Evolution Mining Limited | SINGAPORE AIRLINES vs. PT Bank Maybank |
| Mitie Group vs. SINGAPORE AIRLINES | Mitie Group vs. AEGEAN AIRLINES | Mitie Group vs. AECOM TECHNOLOGY | Mitie Group vs. Casio Computer CoLtd |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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