Correlation Between Singapore Airlines and X Fab

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

Diversification Opportunities for Singapore Airlines and X Fab

0.35

Correlation Coefficient

Singapore Airlines  X Fab

Weak diversification

The 3 months correlation between Singapore and XFB is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and X Fab go up and down completely randomly.

Pair Corralation between Singapore Airlines and X Fab

Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.29 times more return on investment than X Fab. However, Singapore Airlines Limited is 3.39 times less risky than X Fab. It trades about 0.16 of its potential returns per unit of risk. X Fab Silicon is currently generating about 0.03 per unit of risk. If you would invest  444.00  in Singapore Airlines Limited on December 2, 2024 and sell it today you would earn a total of  37.00  from holding Singapore Airlines Limited or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Singapore Airlines Limited  vs.  X Fab Silicon

Singapore Airlines

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Airlines Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Singapore Airlines may actually be approaching a critical reversion point that can send shares even higher in April 2025.

X Fab Silicon

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in X Fab Silicon are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, X Fab is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Singapore Airlines and X Fab

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

The idea behind Singapore Airlines Limited and X Fab Silicon 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.