Correlation Between Singapore Airlines and Cheer Holding

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

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

Diversification Opportunities for Singapore Airlines and Cheer Holding

-0.82

Correlation Coefficient

Singapore Airlines  Cheer Holding

Pay attention - limited upside

The 3 months correlation between Singapore and Cheer is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines and Cheer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheer Holding 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 Cheer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheer Holding has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Cheer Holding go up and down completely randomly.

Pair Corralation between Singapore Airlines and Cheer Holding

Assuming the 90 days horizon Singapore Airlines is expected to generate 0.22 times more return on investment than Cheer Holding. However, Singapore Airlines is 4.52 times less risky than Cheer Holding. It trades about 0.15 of its potential returns per unit of risk. Cheer Holding is currently generating about -0.15 per unit of risk. If you would invest  940.00  in Singapore Airlines on December 20, 2024 and sell it today you would earn a total of  72.00  from holding Singapore Airlines or generate 7.66% return on investment over 90 days.

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

Singapore Airlines  vs.  Cheer Holding

Singapore Airlines

Risk-Adjusted Performance

Good

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

Cheer Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cheer Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Singapore Airlines and Cheer Holding

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

The idea behind Singapore Airlines and Cheer Holding 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.