Correlation Between SHIP HEALTHCARE and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and Singapore Airlines Limited, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Singapore Airlines.
Diversification Opportunities for SHIP HEALTHCARE and Singapore Airlines
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIP and Singapore is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Singapore Airlines go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Singapore Airlines
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 0.84 times more return on investment than Singapore Airlines. However, SHIP HEALTHCARE HLDGINC is 1.2 times less risky than Singapore Airlines. It trades about -0.03 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.16 per unit of risk. If you would invest 1,205 in SHIP HEALTHCARE HLDGINC on January 13, 2025 and sell it today you would lose (25.00) from holding SHIP HEALTHCARE HLDGINC or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. Singapore Airlines Limited
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Singapore Airlines |
SHIP HEALTHCARE and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Singapore Airlines
The main advantage of trading using opposite SHIP HEALTHCARE and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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.| SHIP HEALTHCARE vs. China Communications Services | SHIP HEALTHCARE vs. PACIFIC ONLINE | SHIP HEALTHCARE vs. SALESFORCE INC CDR | SHIP HEALTHCARE vs. CODERE ONLINE LUX |
| Singapore Airlines vs. Atresmedia Corporacin de | Singapore Airlines vs. CNVISION MEDIA | Singapore Airlines vs. Media and Games | Singapore Airlines vs. SOEDER SPORTFISKE AB |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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