Correlation Between SINGAPORE AIRLINES and ScalesLimited
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and ScalesLimited 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 ScalesLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Scales Limited, you can compare the effects of market volatilities on SINGAPORE AIRLINES and ScalesLimited 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 ScalesLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and ScalesLimited.
Diversification Opportunities for SINGAPORE AIRLINES and ScalesLimited
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SINGAPORE and ScalesLimited is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Scales Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scales Limited 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 ScalesLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scales Limited has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and ScalesLimited go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and ScalesLimited
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.46 times more return on investment than ScalesLimited. However, SINGAPORE AIRLINES is 2.2 times less risky than ScalesLimited. It trades about 0.06 of its potential returns per unit of risk. Scales Limited is currently generating about 0.02 per unit of risk. If you would invest 321.00 in SINGAPORE AIRLINES on September 4, 2024 and sell it today you would earn a total of 119.00 from holding SINGAPORE AIRLINES or generate 37.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Scales Limited
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Scales Limited |
SINGAPORE AIRLINES and ScalesLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and ScalesLimited
The main advantage of trading using opposite SINGAPORE AIRLINES and ScalesLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, ScalesLimited 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 ScalesLimited will offset losses from the drop in ScalesLimited's long position.| SINGAPORE AIRLINES vs. TOTAL GABON | SINGAPORE AIRLINES vs. Walgreens Boots Alliance | SINGAPORE AIRLINES vs. Peak Resources Limited |
| ScalesLimited vs. PSI Software AG | ScalesLimited vs. Chunghwa Telecom Co | ScalesLimited vs. Shenandoah Telecommunications | ScalesLimited vs. ATOSS SOFTWARE |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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