Correlation Between Singapore Airlines and VIAPLAY GROUP

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

Diversification Opportunities for Singapore Airlines and VIAPLAY GROUP

-0.29

Correlation Coefficient

Singapore Airlines  VIAPLAY GROUP

Very good diversification

The 3 months correlation between Singapore and VIAPLAY is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and VIAPLAY GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIAPLAY GROUP AB 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 VIAPLAY GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIAPLAY GROUP AB has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and VIAPLAY GROUP go up and down completely randomly.

Pair Corralation between Singapore Airlines and VIAPLAY GROUP

Assuming the 90 days trading horizon Singapore Airlines is expected to generate 163.71 times less return on investment than VIAPLAY GROUP. But when comparing it to its historical volatility, Singapore Airlines Limited is 68.45 times less risky than VIAPLAY GROUP. It trades about 0.07 of its potential returns per unit of risk. VIAPLAY GROUP AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  4.92  in VIAPLAY GROUP AB on December 22, 2024 and sell it today you would lose (1.78) from holding VIAPLAY GROUP AB or give up 36.18% of portfolio value over 90 days.

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

Singapore Airlines Limited  vs.  VIAPLAY GROUP AB

Singapore Airlines

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Airlines Limited are ranked lower than 5 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

VIAPLAY GROUP AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VIAPLAY GROUP AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VIAPLAY GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Singapore Airlines and VIAPLAY GROUP

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

The idea behind Singapore Airlines Limited and VIAPLAY GROUP AB 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.