Correlation Between Natural Health and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Natural 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 Natural 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 Natural Health Trends and Singapore Airlines Limited, you can compare the effects of market volatilities on Natural 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 Natural Health with a short position of Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Singapore Airlines.
Diversification Opportunities for Natural Health and Singapore Airlines
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Singapore is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines and Natural 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 Natural Health Trends 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 Natural Health i.e., Natural Health and Singapore Airlines go up and down completely randomly.
Pair Corralation between Natural Health and Singapore Airlines
Assuming the 90 days trading horizon Natural Health is expected to generate 4.71 times less return on investment than Singapore Airlines. In addition to that, Natural Health is 1.66 times more volatile than Singapore Airlines Limited. It trades about 0.01 of its total potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.04 per unit of volatility. If you would invest 366.00 in Singapore Airlines Limited on September 19, 2024 and sell it today you would earn a total of 81.00 from holding Singapore Airlines Limited or generate 22.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Singapore Airlines Limited
Performance |
| Timeline |
| Natural Health Trends |
| Singapore Airlines |
Natural Health and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Singapore Airlines
The main advantage of trading using opposite Natural Health and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural 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.| Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc |
| Singapore Airlines vs. Chuangs China Investments | Singapore Airlines vs. DiamondRock Hospitality | Singapore Airlines vs. Natural Health Trends | Singapore Airlines vs. YOOMA WELLNESS INC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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