Correlation Between Singapore Airlines and CENTURIA OFFICE

Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and CENTURIA OFFICE 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT, you can compare the effects of market volatilities on Singapore Airlines and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and CENTURIA OFFICE.

Diversification Opportunities for Singapore Airlines and CENTURIA OFFICE

-0.15

Correlation Coefficient

Singapore Airlines  CENTURIA OFFICE

Good diversification

The 3 months correlation between Singapore and CENTURIA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and CENTURIA OFFICE go up and down completely randomly.

Pair Corralation between Singapore Airlines and CENTURIA OFFICE

Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.5 times more return on investment than CENTURIA OFFICE. However, Singapore Airlines Limited is 2.0 times less risky than CENTURIA OFFICE. It trades about 0.04 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about -0.04 per unit of risk. If you would invest  443.00  in Singapore Airlines Limited on October 9, 2024 and sell it today you would earn a total of  11.00  from holding Singapore Airlines Limited or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Singapore Airlines Limited  vs.  CENTURIA OFFICE REIT

Singapore Airlines

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Airlines Limited are ranked lower than 3 (%) 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.

CENTURIA OFFICE REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CENTURIA OFFICE REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CENTURIA OFFICE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Singapore Airlines and CENTURIA OFFICE

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

The idea behind Singapore Airlines Limited and CENTURIA OFFICE REIT 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.