Correlation Between Treasury Wine and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Treasury Wine 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 Treasury Wine and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treasury Wine Estates and Singapore Airlines Limited, you can compare the effects of market volatilities on Treasury Wine 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 Treasury Wine with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Singapore Airlines.
Diversification Opportunities for Treasury Wine and Singapore Airlines
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Treasury and Singapore is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Treasury Wine 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 Treasury Wine Estates 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 Treasury Wine i.e., Treasury Wine and Singapore Airlines go up and down completely randomly.
Pair Corralation between Treasury Wine and Singapore Airlines
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Singapore Airlines. In addition to that, Treasury Wine is 1.04 times more volatile than Singapore Airlines Limited. It trades about -0.5 of its total potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.01 per unit of volatility. If you would invest 451.00 in Singapore Airlines Limited on October 14, 2024 and sell it today you would lose (1.00) from holding Singapore Airlines Limited or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Singapore Airlines Limited
Performance |
| Timeline |
| Treasury Wine Estates |
| Singapore Airlines |
Treasury Wine and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Singapore Airlines
The main advantage of trading using opposite Treasury Wine and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine 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.| Treasury Wine vs. Penn National Gaming | Treasury Wine vs. Ryanair Holdings plc | Treasury Wine vs. Boyd Gaming | Treasury Wine vs. Media and Games |
| Singapore Airlines vs. PICKN PAY STORES | Singapore Airlines vs. Burlington Stores | Singapore Airlines vs. Treasury Wine Estates | Singapore Airlines vs. GEAR4MUSIC LS 10 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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