Correlation Between JD SPORTS and SINGAPORE AIRLINES

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

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

Diversification Opportunities for JD SPORTS and SINGAPORE AIRLINES

0.16

Correlation Coefficient

JD SPORTS  SINGAPORE AIRLINES

Average diversification

The 3 months correlation between 9JD and SINGAPORE is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and JD SPORTS 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 JD SPORTS FASH 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 JD SPORTS i.e., JD SPORTS and SINGAPORE AIRLINES go up and down completely randomly.

Pair Corralation between JD SPORTS and SINGAPORE AIRLINES

Assuming the 90 days horizon JD SPORTS is expected to generate 8.59 times less return on investment than SINGAPORE AIRLINES. In addition to that, JD SPORTS is 2.46 times more volatile than SINGAPORE AIRLINES. It trades about 0.0 of its total potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.06 per unit of volatility. If you would invest  318.00  in SINGAPORE AIRLINES on September 24, 2024 and sell it today you would earn a total of  128.00  from holding SINGAPORE AIRLINES or generate 40.25% return on investment over 90 days.

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

JD SPORTS FASH  vs.  SINGAPORE AIRLINES

JD SPORTS FASH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD SPORTS FASH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SINGAPORE AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SINGAPORE AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SINGAPORE AIRLINES is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JD SPORTS and SINGAPORE AIRLINES

The main advantage of trading using opposite JD SPORTS and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS 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 JD SPORTS FASH 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.