Correlation Between Xinhua Winshare and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Singapore Airlines 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 Xinhua Winshare and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinhua Winshare Publishing and Singapore Airlines Limited, you can compare the effects of market volatilities on Xinhua Winshare and Singapore Airlines 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 Xinhua Winshare with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Singapore Airlines.
Diversification Opportunities for Xinhua Winshare and Singapore Airlines
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xinhua and Singapore is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Xinhua Winshare 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 Xinhua Winshare Publishing are associated (or correlated) with Singapore Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Airlines has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Singapore Airlines go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Singapore Airlines
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 1.42 times more return on investment than Singapore Airlines. However, Xinhua Winshare is 1.42 times more volatile than Singapore Airlines Limited. It trades about 0.27 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.09 per unit of risk. If you would invest 109.00 in Xinhua Winshare Publishing on September 5, 2024 and sell it today you would earn a total of 10.00 from holding Xinhua Winshare Publishing or generate 9.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. Singapore Airlines Limited
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Singapore Airlines |
Xinhua Winshare and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Singapore Airlines
The main advantage of trading using opposite Xinhua Winshare and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Singapore Airlines 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 Singapore Airlines will offset losses from the drop in Singapore Airlines' long position.| Xinhua Winshare vs. Computer And Technologies | Xinhua Winshare vs. SMA Solar Technology | Xinhua Winshare vs. Align Technology | Xinhua Winshare vs. DXC Technology Co |
| Singapore Airlines vs. Delta Air Lines | Singapore Airlines vs. AIR CHINA LTD | Singapore Airlines vs. RYANAIR HLDGS ADR | Singapore Airlines vs. China Southern Airlines |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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