Correlation Between COVIVIO HOTELS and SINGAPORE AIRLINES

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

By analyzing existing cross correlation between COVIVIO HOTELS INH and SINGAPORE AIRLINES, you can compare the effects of market volatilities on COVIVIO HOTELS and SINGAPORE AIRLINES 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 COVIVIO HOTELS with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and SINGAPORE AIRLINES.

Diversification Opportunities for COVIVIO HOTELS and SINGAPORE AIRLINES

0.62

Correlation Coefficient

COVIVIO HOTELS  SINGAPORE AIRLINES

Poor diversification

The 3 months correlation between COVIVIO and SINGAPORE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and COVIVIO HOTELS 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 COVIVIO HOTELS INH are associated (or correlated) with SINGAPORE AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE AIRLINES has no effect on the direction of COVIVIO HOTELS i.e., COVIVIO HOTELS and SINGAPORE AIRLINES go up and down completely randomly.

Pair Corralation between COVIVIO HOTELS and SINGAPORE AIRLINES

Assuming the 90 days horizon COVIVIO HOTELS is expected to generate 1.36 times less return on investment than SINGAPORE AIRLINES. In addition to that, COVIVIO HOTELS is 1.96 times more volatile than SINGAPORE AIRLINES. It trades about 0.09 of its total potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.25 per unit of volatility. If you would invest  426.00  in SINGAPORE AIRLINES on April 20, 2025 and sell it today you would earn a total of  65.00  from holding SINGAPORE AIRLINES or generate 15.26% return on investment over 90 days.

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

COVIVIO HOTELS INH  vs.  SINGAPORE AIRLINES

COVIVIO HOTELS INH

Risk-Adjusted Performance

OK

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

SINGAPORE AIRLINES

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE AIRLINES are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SINGAPORE AIRLINES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COVIVIO HOTELS and SINGAPORE AIRLINES

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

The idea behind COVIVIO HOTELS INH and SINGAPORE AIRLINES 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.