Correlation Between Nufarm Finance and Singular Health
Can any of the company-specific risk be diversified away by investing in both Nufarm Finance 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 Nufarm Finance and Singular Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm Finance NZ and Singular Health Group, you can compare the effects of market volatilities on Nufarm Finance 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 Nufarm Finance with a short position of Singular Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm Finance and Singular Health.
Diversification Opportunities for Nufarm Finance and Singular Health
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nufarm and Singular is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Finance NZ 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 Nufarm Finance 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 Nufarm Finance NZ 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 Nufarm Finance i.e., Nufarm Finance and Singular Health go up and down completely randomly.
Pair Corralation between Nufarm Finance and Singular Health
Assuming the 90 days trading horizon Nufarm Finance is expected to generate 7.52 times less return on investment than Singular Health. But when comparing it to its historical volatility, Nufarm Finance NZ is 11.12 times less risky than Singular Health. It trades about 0.26 of its potential returns per unit of risk. Singular Health Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 8.90 in Singular Health Group on August 31, 2024 and sell it today you would earn a total of 2.10 from holding Singular Health Group or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Finance NZ vs. Singular Health Group
Performance |
| Timeline |
| Nufarm Finance NZ |
| Singular Health Group |
Nufarm Finance and Singular Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm Finance and Singular Health
The main advantage of trading using opposite Nufarm Finance and Singular Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm Finance 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.| Nufarm Finance vs. Ecofibre | Nufarm Finance vs. iShares Global Healthcare | Nufarm Finance vs. Ridley | Nufarm Finance vs. Australian Dairy Farms |
| Singular Health vs. Aussie Broadband | Singular Health vs. Healthco Healthcare and | Singular Health vs. Ras Technology Holdings | Singular Health vs. Ainsworth Game Technology |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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