Correlation Between FLOW TRADERS and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Singapore Airlines Limited, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Singapore Airlines.
Diversification Opportunities for FLOW TRADERS and Singapore Airlines
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FLOW and Singapore is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Singapore Airlines go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Singapore Airlines
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 1.16 times more return on investment than Singapore Airlines. However, FLOW TRADERS is 1.16 times more volatile than Singapore Airlines Limited. It trades about 0.24 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.01 per unit of risk. If you would invest 1,788 in FLOW TRADERS LTD on September 23, 2024 and sell it today you would earn a total of 426.00 from holding FLOW TRADERS LTD or generate 23.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FLOW TRADERS LTD vs. Singapore Airlines Limited
Performance |
Timeline |
FLOW TRADERS LTD |
Singapore Airlines |
FLOW TRADERS and Singapore Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FLOW TRADERS and Singapore Airlines
The main advantage of trading using opposite FLOW TRADERS and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. The Charles Schwab | FLOW TRADERS vs. The Goldman Sachs |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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