Correlation Between SINGAPORE AIRLINES and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES and BJs Restaurants 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 BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and BJs Restaurants, you can compare the effects of market volatilities on SINGAPORE AIRLINES and BJs Restaurants 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 BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and BJs Restaurants.
Diversification Opportunities for SINGAPORE AIRLINES and BJs Restaurants
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between SINGAPORE and BJs is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants 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 BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and BJs Restaurants go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and BJs Restaurants
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 9.39 times less return on investment than BJs Restaurants. But when comparing it to its historical volatility, SINGAPORE AIRLINES is 2.71 times less risky than BJs Restaurants. It trades about 0.07 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,140 in BJs Restaurants on September 2, 2024 and sell it today you would earn a total of 440.00 from holding BJs Restaurants or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. BJs Restaurants
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| BJs Restaurants |
SINGAPORE AIRLINES and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and BJs Restaurants
The main advantage of trading using opposite SINGAPORE AIRLINES and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES position performs unexpectedly, BJs Restaurants 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 BJs Restaurants will offset losses from the drop in BJs Restaurants' long position.| SINGAPORE AIRLINES vs. SIVERS SEMICONDUCTORS AB | SINGAPORE AIRLINES vs. Darden Restaurants | SINGAPORE AIRLINES vs. Reliance Steel Aluminum | SINGAPORE AIRLINES vs. Q2M Managementberatung AG |
| BJs Restaurants vs. ELECTRONIC ARTS | BJs Restaurants vs. REVO INSURANCE SPA | BJs Restaurants vs. Japan Post Insurance | BJs Restaurants vs. Safety Insurance Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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