Correlation Between SINGAPORE AIRLINES and Gladstone Commercial

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

By analyzing existing cross correlation between SINGAPORE AIRLINES and Gladstone Commercial, you can compare the effects of market volatilities on SINGAPORE AIRLINES and Gladstone Commercial 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 Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Gladstone Commercial.

Diversification Opportunities for SINGAPORE AIRLINES and Gladstone Commercial

-0.21

Correlation Coefficient

SINGAPORE AIRLINES  Gladstone Commercial

Very good diversification

The 3 months correlation between SINGAPORE and Gladstone is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Gladstone Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial 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 are associated (or correlated) with Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Gladstone Commercial go up and down completely randomly.

Pair Corralation between SINGAPORE AIRLINES and Gladstone Commercial

Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.53 times more return on investment than Gladstone Commercial. However, SINGAPORE AIRLINES is 1.89 times less risky than Gladstone Commercial. It trades about 0.06 of its potential returns per unit of risk. Gladstone Commercial is currently generating about 0.02 per unit of risk. If you would invest  319.00  in SINGAPORE AIRLINES on September 23, 2024 and sell it today you would earn a total of  127.00  from holding SINGAPORE AIRLINES or generate 39.81% return on investment over 90 days.

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

SINGAPORE AIRLINES  vs.  Gladstone Commercial

SINGAPORE AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SINGAPORE AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SINGAPORE AIRLINES is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Gladstone Commercial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Commercial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Gladstone Commercial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SINGAPORE AIRLINES and Gladstone Commercial

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

The idea behind SINGAPORE AIRLINES and Gladstone Commercial 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.