Correlation Between URBAN OUTFITTERS and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both URBAN OUTFITTERS 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 URBAN OUTFITTERS and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URBAN OUTFITTERS and SINGAPORE AIRLINES, you can compare the effects of market volatilities on URBAN OUTFITTERS 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 URBAN OUTFITTERS with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of URBAN OUTFITTERS and SINGAPORE AIRLINES.
Diversification Opportunities for URBAN OUTFITTERS and SINGAPORE AIRLINES
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between URBAN and SINGAPORE is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding URBAN OUTFITTERS and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS i.e., URBAN OUTFITTERS and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between URBAN OUTFITTERS and SINGAPORE AIRLINES
Assuming the 90 days trading horizon URBAN OUTFITTERS is expected to generate 2.11 times more return on investment than SINGAPORE AIRLINES. However, URBAN OUTFITTERS is 2.11 times more volatile than SINGAPORE AIRLINES. It trades about 0.06 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.06 per unit of risk. If you would invest 2,383 in URBAN OUTFITTERS on August 31, 2024 and sell it today you would earn a total of 2,097 from holding URBAN OUTFITTERS or generate 88.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
URBAN OUTFITTERS vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| URBAN OUTFITTERS |
| SINGAPORE AIRLINES |
URBAN OUTFITTERS and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URBAN OUTFITTERS and SINGAPORE AIRLINES
The main advantage of trading using opposite URBAN OUTFITTERS and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URBAN OUTFITTERS 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's long position.| URBAN OUTFITTERS vs. AM EAGLE OUTFITTERS | URBAN OUTFITTERS vs. American Airlines Group | URBAN OUTFITTERS vs. Gladstone Investment | URBAN OUTFITTERS vs. G III Apparel Group |
| SINGAPORE AIRLINES vs. Fair Isaac Corp | SINGAPORE AIRLINES vs. Air New Zealand | SINGAPORE AIRLINES vs. NTG Nordic Transport | SINGAPORE AIRLINES vs. Texas Roadhouse |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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