Correlation Between USWE SPORTS and SINGAPORE AIRLINES

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

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

Diversification Opportunities for USWE SPORTS and SINGAPORE AIRLINES

-0.2

Correlation Coefficient

USWE SPORTS  SINGAPORE AIRLINES

Good diversification

The 3 months correlation between USWE and SINGAPORE is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and USWE SPORTS 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 USWE SPORTS AB 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 USWE SPORTS i.e., USWE SPORTS and SINGAPORE AIRLINES go up and down completely randomly.

Pair Corralation between USWE SPORTS and SINGAPORE AIRLINES

Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the SINGAPORE AIRLINES. In addition to that, USWE SPORTS is 3.24 times more volatile than SINGAPORE AIRLINES. It trades about -0.02 of its total potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.05 per unit of volatility. If you would invest  339.00  in SINGAPORE AIRLINES on October 11, 2024 and sell it today you would earn a total of  115.00  from holding SINGAPORE AIRLINES or generate 33.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

USWE SPORTS AB  vs.  SINGAPORE AIRLINES

USWE SPORTS AB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in USWE SPORTS AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, USWE SPORTS reported solid returns over the last few months and may actually be approaching a breakup point.

SINGAPORE AIRLINES

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE AIRLINES are ranked lower than 4 (%) 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 USWE SPORTS and SINGAPORE AIRLINES

The main advantage of trading using opposite USWE SPORTS and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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 USWE SPORTS AB 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .