Correlation Between Singapore Airlines and Valens

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

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

Diversification Opportunities for Singapore Airlines and Valens

0.44

Correlation Coefficient

Singapore Airlines  Valens

Very weak diversification

The 3 months correlation between Singapore and Valens is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens 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 Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Valens go up and down completely randomly.

Pair Corralation between Singapore Airlines and Valens

Assuming the 90 days horizon Singapore Airlines is expected to under-perform the Valens. But the pink sheet apears to be less risky and, when comparing its historical volatility, Singapore Airlines is 3.84 times less risky than Valens. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Valens is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  236.00  in Valens on May 7, 2025 and sell it today you would earn a total of  2.00  from holding Valens or generate 0.85% return on investment over 90 days.

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

Singapore Airlines  vs.  Valens

Singapore Airlines

Risk-Adjusted Performance

Weakest

Over the last 90 days Singapore Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Singapore Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Valens

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Valens are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Valens may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Singapore Airlines and Valens

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

The idea behind Singapore Airlines and Valens 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.