Correlation Between ALLIANZ TECHNOTRLS-025 and SINGAPORE AIRLINES

Can any of the company-specific risk be diversified away by investing in both ALLIANZ TECHNOTRLS-025 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 ALLIANZ TECHNOTRLS-025 and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ALLIANZ TECHNOTRLS 025 and SINGAPORE AIRLINES, you can compare the effects of market volatilities on ALLIANZ TECHNOTRLS-025 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 ALLIANZ TECHNOTRLS-025 with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLIANZ TECHNOTRLS-025 and SINGAPORE AIRLINES.

Diversification Opportunities for ALLIANZ TECHNOTRLS-025 and SINGAPORE AIRLINES

0.63

Correlation Coefficient

ALLIANZ TECHNOTRLS-025  SINGAPORE AIRLINES

Poor diversification

The 3 months correlation between ALLIANZ and SINGAPORE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ALLIANZ TECHNOTRLS 025 and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and ALLIANZ TECHNOTRLS-025 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 ALLIANZ TECHNOTRLS 025 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 ALLIANZ TECHNOTRLS-025 i.e., ALLIANZ TECHNOTRLS-025 and SINGAPORE AIRLINES go up and down completely randomly.

Pair Corralation between ALLIANZ TECHNOTRLS-025 and SINGAPORE AIRLINES

Assuming the 90 days horizon ALLIANZ TECHNOTRLS 025 is expected to generate 2.53 times more return on investment than SINGAPORE AIRLINES. However, ALLIANZ TECHNOTRLS-025 is 2.53 times more volatile than SINGAPORE AIRLINES. It trades about 0.17 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.11 per unit of risk. If you would invest  498.00  in ALLIANZ TECHNOTRLS 025 on October 10, 2024 and sell it today you would earn a total of  22.00  from holding ALLIANZ TECHNOTRLS 025 or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

ALLIANZ TECHNOTRLS 025  vs.  SINGAPORE AIRLINES

ALLIANZ TECHNOTRLS 025

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ALLIANZ TECHNOTRLS 025 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, ALLIANZ TECHNOTRLS-025 reported solid returns over the last few months and may actually be approaching a breakup point.

SINGAPORE AIRLINES

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE AIRLINES are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SINGAPORE AIRLINES is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ALLIANZ TECHNOTRLS-025 and SINGAPORE AIRLINES

The main advantage of trading using opposite ALLIANZ TECHNOTRLS-025 and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLIANZ TECHNOTRLS-025 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.

The idea behind ALLIANZ TECHNOTRLS 025 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.