Correlation Between SINGAPORE AIRLINES and Shenandoah Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Shenandoah Telecommunications, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Shenandoah Telecommunicatio.
Diversification Opportunities for SINGAPORE AIRLINES and Shenandoah Telecommunicatio
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between SINGAPORE and Shenandoah is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenandoah Telecommunicatio has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Shenandoah Telecommunicatio go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Shenandoah Telecommunicatio
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.42 times more return on investment than Shenandoah Telecommunicatio. However, SINGAPORE AIRLINES is 2.37 times less risky than Shenandoah Telecommunicatio. It trades about 0.02 of its potential returns per unit of risk. Shenandoah Telecommunications is currently generating about -0.02 per unit of risk. If you would invest 415.00 in SINGAPORE AIRLINES on September 1, 2024 and sell it today you would earn a total of 25.00 from holding SINGAPORE AIRLINES or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Shenandoah Telecommunications
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Shenandoah Telecommunicatio |
SINGAPORE AIRLINES and Shenandoah Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Shenandoah Telecommunicatio
The main advantage of trading using opposite SINGAPORE AIRLINES and Shenandoah Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio will offset losses from the drop in Shenandoah Telecommunicatio's long position.| SINGAPORE AIRLINES vs. MAGNUM MINING EXP | SINGAPORE AIRLINES vs. FIREWEED METALS P | SINGAPORE AIRLINES vs. Alfa Financial Software | SINGAPORE AIRLINES vs. Coeur Mining |
| Shenandoah Telecommunicatio vs. ATT Inc | Shenandoah Telecommunicatio vs. Deutsche Telekom AG | Shenandoah Telecommunicatio vs. Superior Plus Corp | Shenandoah Telecommunicatio vs. NMI Holdings |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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