Correlation Between Telecom and Singapore Airlines
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By analyzing existing cross correlation between Telecom Italia Capital and Singapore Airlines, you can compare the effects of market volatilities on Telecom 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 Telecom with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom and Singapore Airlines.
Diversification Opportunities for Telecom and Singapore Airlines
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telecom and Singapore is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia Capital and Singapore Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Telecom 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 Telecom Italia Capital 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 Telecom i.e., Telecom and Singapore Airlines go up and down completely randomly.
Pair Corralation between Telecom and Singapore Airlines
Assuming the 90 days trading horizon Telecom Italia Capital is expected to under-perform the Singapore Airlines. In addition to that, Telecom is 3.17 times more volatile than Singapore Airlines. It trades about -0.24 of its total potential returns per unit of risk. Singapore Airlines is currently generating about -0.07 per unit of volatility. If you would invest 932.00 in Singapore Airlines on October 23, 2024 and sell it today you would lose (9.00) from holding Singapore Airlines or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Italia Capital vs. Singapore Airlines
Performance |
| Timeline |
| Telecom Italia Capital |
| Singapore Airlines |
Telecom and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom and Singapore Airlines
The main advantage of trading using opposite Telecom and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom 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.The idea behind Telecom Italia Capital and Singapore Airlines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Singapore Airlines vs. Cathay Pacific Airways | Singapore Airlines vs. Qantas Airways Ltd | Singapore Airlines vs. International Consolidated Airlines | Singapore Airlines vs. Singapore 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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