Correlation Between CSL and Singapore Airlines

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

By analyzing existing cross correlation between CSL Limited and Singapore Airlines Limited, you can compare the effects of market volatilities on CSL 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 CSL with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Singapore Airlines.

Diversification Opportunities for CSL and Singapore Airlines

0.45

Correlation Coefficient

CSL  Singapore Airlines

Very weak diversification

The 3 months correlation between CSL and Singapore is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and CSL 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 CSL Limited 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 CSL i.e., CSL and Singapore Airlines go up and down completely randomly.

Pair Corralation between CSL and Singapore Airlines

Assuming the 90 days horizon CSL Limited is expected to under-perform the Singapore Airlines. In addition to that, CSL is 1.4 times more volatile than Singapore Airlines Limited. It trades about -0.12 of its total potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.1 per unit of volatility. If you would invest  490.00  in Singapore Airlines Limited on July 26, 2025 and sell it today you would lose (51.00) from holding Singapore Airlines Limited or give up 10.41% of portfolio value over 90 days.

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

CSL Limited  vs.  Singapore Airlines Limited

CSL Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days CSL Limited 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 November 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Singapore Airlines

Risk-Adjusted Performance

Weakest

Over the last 90 days Singapore Airlines Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CSL and Singapore Airlines

The main advantage of trading using opposite CSL and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL 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' long position.

The idea behind CSL Limited and Singapore Airlines Limited 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.