Correlation Between Singapore Airlines and MOLSON COORS

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

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

Diversification Opportunities for Singapore Airlines and MOLSON COORS

0.01

Correlation Coefficient

Singapore Airlines  MOLSON COORS

Significant diversification

The 3 months correlation between Singapore and MOLSON is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 Limited are associated (or correlated) with MOLSON COORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and MOLSON COORS go up and down completely randomly.

Pair Corralation between Singapore Airlines and MOLSON COORS

Assuming the 90 days trading horizon Singapore Airlines is expected to generate 3.51 times less return on investment than MOLSON COORS. In addition to that, Singapore Airlines is 1.32 times more volatile than MOLSON RS BEVERAGE. It trades about 0.09 of its total potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.41 per unit of volatility. If you would invest  5,050  in MOLSON RS BEVERAGE on August 31, 2024 and sell it today you would earn a total of  500.00  from holding MOLSON RS BEVERAGE or generate 9.9% return on investment over 90 days.

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

Singapore Airlines Limited  vs.  MOLSON RS BEVERAGE

Singapore Airlines

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Airlines Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Singapore Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MOLSON RS BEVERAGE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOLSON RS BEVERAGE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOLSON COORS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Singapore Airlines and MOLSON COORS

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

The idea behind Singapore Airlines Limited and MOLSON RS BEVERAGE 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.