Correlation Between Singapore Airlines and KYUSHU EL

Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and KYUSHU EL 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 Singapore Airlines and KYUSHU EL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Singapore Airlines Limited and KYUSHU EL PWR, you can compare the effects of market volatilities on Singapore Airlines and KYUSHU EL 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 Singapore Airlines with a short position of KYUSHU EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and KYUSHU EL.

Diversification Opportunities for Singapore Airlines and KYUSHU EL

-0.23

Correlation Coefficient

Singapore Airlines  KYUSHU EL

Very good diversification

The 3 months correlation between Singapore and KYUSHU is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and KYUSHU EL PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYUSHU EL PWR and Singapore Airlines 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 Singapore Airlines Limited are associated (or correlated) with KYUSHU EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYUSHU EL PWR has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and KYUSHU EL go up and down completely randomly.

Pair Corralation between Singapore Airlines and KYUSHU EL

Assuming the 90 days trading horizon Singapore Airlines is expected to generate 1.84 times less return on investment than KYUSHU EL. But when comparing it to its historical volatility, Singapore Airlines Limited is 1.61 times less risky than KYUSHU EL. It trades about 0.05 of its potential returns per unit of risk. KYUSHU EL PWR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  500.00  in KYUSHU EL PWR on October 4, 2024 and sell it today you would earn a total of  340.00  from holding KYUSHU EL PWR or generate 68.0% return on investment over 90 days.

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

Singapore Airlines Limited  vs.  KYUSHU EL PWR

Singapore Airlines

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Airlines Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Singapore Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KYUSHU EL PWR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KYUSHU EL PWR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Singapore Airlines and KYUSHU EL

The main advantage of trading using opposite Singapore Airlines and KYUSHU EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, KYUSHU EL 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 KYUSHU EL will offset losses from the drop in KYUSHU EL's long position.

The idea behind Singapore Airlines Limited and KYUSHU EL PWR 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.