Correlation Between Singapore Airlines and Able View

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

By analyzing existing cross correlation between Singapore Airlines and Able View Global, you can compare the effects of market volatilities on Singapore Airlines and Able View 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 Able View. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Able View.

Diversification Opportunities for Singapore Airlines and Able View

0.73

Correlation Coefficient

Singapore Airlines  Able View

Poor diversification

The 3 months correlation between Singapore and Able is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines and Able View Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Able View Global 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 Able View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Able View Global has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Able View go up and down completely randomly.

Pair Corralation between Singapore Airlines and Able View

Assuming the 90 days horizon Singapore Airlines is expected to under-perform the Able View. But the pink sheet apears to be less risky and, when comparing its historical volatility, Singapore Airlines is 20.55 times less risky than Able View. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Able View Global is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1.32  in Able View Global on October 9, 2024 and sell it today you would earn a total of  0.68  from holding Able View Global or generate 51.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	50.0%
Values	Daily Returns

Singapore Airlines  vs.  Able View Global

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 fairly strong technical and fundamental indicators, Singapore Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Able View Global

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Able View Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady basic indicators, Able View showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Singapore Airlines and Able View

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

The idea behind Singapore Airlines and Able View Global 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.