Correlation Between Health and Singular Health
Can any of the company-specific risk be diversified away by investing in both Health and Singular Health 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 Health and Singular Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health and Plant and Singular Health Group, you can compare the effects of market volatilities on Health and Singular Health 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 Health with a short position of Singular Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health and Singular Health.
Diversification Opportunities for Health and Singular Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Health and Singular is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health and Plant and Singular Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singular Health Group and 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 Health and Plant are associated (or correlated) with Singular Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singular Health Group has no effect on the direction of Health i.e., Health and Singular Health go up and down completely randomly.
Pair Corralation between Health and Singular Health
Assuming the 90 days trading horizon Health and Plant is expected to under-perform the Singular Health. But the stock apears to be less risky and, when comparing its historical volatility, Health and Plant is 6.7 times less risky than Singular Health. The stock trades about -0.07 of its potential returns per unit of risk. The Singular Health Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5.20 in Singular Health Group on August 29, 2024 and sell it today you would earn a total of 6.80 from holding Singular Health Group or generate 130.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health and Plant vs. Singular Health Group
Performance |
| Timeline |
| Health and Plant |
| Singular Health Group |
Health and Singular Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health and Singular Health
The main advantage of trading using opposite Health and Singular Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health position performs unexpectedly, Singular Health 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 Singular Health will offset losses from the drop in Singular Health's long position.| Health vs. Aneka Tambang Tbk | Health vs. BHP Group Limited | Health vs. Commonwealth Bank of | Health vs. Commonwealth Bank of |
| Singular Health vs. Vulcan Steel | Singular Health vs. Hotel Property Investments | Singular Health vs. The Environmental Group | Singular Health vs. Regal 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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