Correlation Between Singapore Airlines and PFIZER

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

By analyzing existing cross correlation between Singapore Airlines and PFIZER INC 4, you can compare the effects of market volatilities on Singapore Airlines and PFIZER 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 PFIZER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and PFIZER.

Diversification Opportunities for Singapore Airlines and PFIZER

0.37

Correlation Coefficient

Singapore Airlines  PFIZER

Weak diversification

The 3 months correlation between Singapore and PFIZER is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines and PFIZER INC 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC 4 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 PFIZER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFIZER INC 4 has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and PFIZER go up and down completely randomly.

Pair Corralation between Singapore Airlines and PFIZER

Assuming the 90 days horizon Singapore Airlines is expected to generate 0.69 times more return on investment than PFIZER. However, Singapore Airlines is 1.45 times less risky than PFIZER. It trades about 0.16 of its potential returns per unit of risk. PFIZER INC 4 is currently generating about -0.08 per unit of risk. If you would invest  939.00  in Singapore Airlines on December 24, 2024 and sell it today you would earn a total of  74.00  from holding Singapore Airlines or generate 7.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Singapore Airlines  vs.  PFIZER INC 4

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.

PFIZER INC 4

Risk-Adjusted Performance

Very Weak

Over the last 90 days PFIZER INC 4 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PFIZER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Singapore Airlines and PFIZER

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

The idea behind Singapore Airlines and PFIZER INC 4 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.