Correlation Between SINGAPORE AIRLINES and BASF SE

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

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

Diversification Opportunities for SINGAPORE AIRLINES and BASF SE

-0.05

Correlation Coefficient

SINGAPORE AIRLINES  BASF SE

Good diversification

The 3 months correlation between SINGAPORE and BASF is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE 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 BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE has no effect on the direction of SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and BASF SE go up and down completely randomly.

Pair Corralation between SINGAPORE AIRLINES and BASF SE

Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 0.55 times more return on investment than BASF SE. However, SINGAPORE AIRLINES is 1.81 times less risky than BASF SE. It trades about 0.19 of its potential returns per unit of risk. BASF SE is currently generating about 0.06 per unit of risk. If you would invest  444.00  in SINGAPORE AIRLINES on April 25, 2025 and sell it today you would earn a total of  46.00  from holding SINGAPORE AIRLINES or generate 10.36% 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.  BASF SE

SINGAPORE AIRLINES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE AIRLINES are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SINGAPORE AIRLINES may actually be approaching a critical reversion point that can send shares even higher in August 2025.

BASF SE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BASF SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BASF SE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SINGAPORE AIRLINES and BASF SE

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

The idea behind SINGAPORE AIRLINES and BASF SE 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..