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 |
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
Performance |
Timeline |
SINGAPORE AIRLINES |
BASF SE |
SINGAPORE AIRLINES and BASF SE Volatility Contrast
Predicted Return Density |
Returns |
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.SINGAPORE AIRLINES vs. EMBARK EDUCATION LTD | SINGAPORE AIRLINES vs. Adtalem Global Education | SINGAPORE AIRLINES vs. Universal Electronics | SINGAPORE AIRLINES vs. Strategic Education |
BASF SE vs. GAMES OPERATORS SA | BASF SE vs. BRAGG GAMING GRP | BASF SE vs. Corsair Gaming | BASF SE vs. FUTURE GAMING GRP |
Check out your portfolio center.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..
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