Correlation Between ASPEN TECHINC and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both ASPEN TECHINC 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 ASPEN TECHINC and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN TECHINC DL and SINGAPORE AIRLINES, you can compare the effects of market volatilities on ASPEN TECHINC 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 ASPEN TECHINC with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN TECHINC and SINGAPORE AIRLINES.
Diversification Opportunities for ASPEN TECHINC and SINGAPORE AIRLINES
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASPEN and SINGAPORE is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and ASPEN TECHINC 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 ASPEN TECHINC DL 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 ASPEN TECHINC i.e., ASPEN TECHINC and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between ASPEN TECHINC and SINGAPORE AIRLINES
Assuming the 90 days horizon ASPEN TECHINC DL is expected to generate 1.67 times more return on investment than SINGAPORE AIRLINES. However, ASPEN TECHINC is 1.67 times more volatile than SINGAPORE AIRLINES. It trades about 0.11 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.04 per unit of risk. If you would invest 17,951 in ASPEN TECHINC DL on October 17, 2024 and sell it today you would earn a total of 6,249 from holding ASPEN TECHINC DL or generate 34.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.32% |
| Values | Daily Returns |
ASPEN TECHINC DL vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| ASPEN TECHINC DL |
| SINGAPORE AIRLINES |
ASPEN TECHINC and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN TECHINC and SINGAPORE AIRLINES
The main advantage of trading using opposite ASPEN TECHINC and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC 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.| ASPEN TECHINC vs. G III Apparel Group | ASPEN TECHINC vs. AM EAGLE OUTFITTERS | ASPEN TECHINC vs. BJs Wholesale Club | ASPEN TECHINC vs. Ross Stores |
| SINGAPORE AIRLINES vs. FLOW TRADERS LTD | SINGAPORE AIRLINES vs. The Trade Desk | SINGAPORE AIRLINES vs. ASPEN TECHINC DL | SINGAPORE AIRLINES vs. Treasury Wine Estates |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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