Correlation Between CARDINAL HEALTH and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both CARDINAL HEALTH 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 CARDINAL HEALTH and Singapore Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARDINAL HEALTH and Singapore Airlines Limited, you can compare the effects of market volatilities on CARDINAL HEALTH 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 CARDINAL HEALTH with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARDINAL HEALTH and Singapore Airlines.
Diversification Opportunities for CARDINAL HEALTH and Singapore Airlines
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between CARDINAL and Singapore is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CARDINAL HEALTH and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and CARDINAL HEALTH 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 CARDINAL HEALTH 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 CARDINAL HEALTH i.e., CARDINAL HEALTH and Singapore Airlines go up and down completely randomly.
Pair Corralation between CARDINAL HEALTH and Singapore Airlines
Assuming the 90 days trading horizon CARDINAL HEALTH is expected to generate 0.87 times more return on investment than Singapore Airlines. However, CARDINAL HEALTH is 1.14 times less risky than Singapore Airlines. It trades about 0.39 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.03 per unit of risk. If you would invest 11,535 in CARDINAL HEALTH on November 7, 2024 and sell it today you would earn a total of 785.00 from holding CARDINAL HEALTH or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CARDINAL HEALTH vs. Singapore Airlines Limited
Performance |
| Timeline |
| CARDINAL HEALTH |
| Singapore Airlines |
CARDINAL HEALTH and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARDINAL HEALTH and Singapore Airlines
The main advantage of trading using opposite CARDINAL HEALTH and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARDINAL HEALTH 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.| CARDINAL HEALTH vs. HF SINCLAIR P | CARDINAL HEALTH vs. Geely Automobile Holdings | CARDINAL HEALTH vs. Altair Engineering | CARDINAL HEALTH vs. Infrastrutture Wireless Italiane |
| Singapore Airlines vs. Peijia Medical Limited | Singapore Airlines vs. Japan Medical Dynamic | Singapore Airlines vs. Advanced Medical Solutions | Singapore Airlines vs. Diamyd Medical 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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