Correlation Between Regions Financial and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Regions Financial 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 Regions Financial and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Singapore Airlines Limited, you can compare the effects of market volatilities on Regions Financial 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 Regions Financial with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Singapore Airlines.
Diversification Opportunities for Regions Financial and Singapore Airlines
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regions and Singapore is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Regions Financial 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 Regions Financial 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 Regions Financial i.e., Regions Financial and Singapore Airlines go up and down completely randomly.
Pair Corralation between Regions Financial and Singapore Airlines
Assuming the 90 days horizon Regions Financial is expected to generate 1.67 times more return on investment than Singapore Airlines. However, Regions Financial is 1.67 times more volatile than Singapore Airlines Limited. It trades about 0.07 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.0 per unit of risk. If you would invest 2,040 in Regions Financial on September 24, 2024 and sell it today you would earn a total of 180.00 from holding Regions Financial or generate 8.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Regions Financial vs. Singapore Airlines Limited
Performance |
Timeline |
Regions Financial |
Singapore Airlines |
Regions Financial and Singapore Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regions Financial and Singapore Airlines
The main advantage of trading using opposite Regions Financial and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial 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.Regions Financial vs. The PNC Financial | Regions Financial vs. MT Bank Corp | Regions Financial vs. Huntington Bancshares Incorporated | Regions Financial vs. Citizens Financial Group |
Singapore Airlines vs. EAT WELL INVESTMENT | Singapore Airlines vs. Strategic Investments AS | Singapore Airlines vs. ECHO INVESTMENT ZY | Singapore Airlines vs. United Airlines Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |