Correlation Between PULSION Medical and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both PULSION Medical 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 PULSION Medical and SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PULSION Medical Systems and SINGAPORE AIRLINES, you can compare the effects of market volatilities on PULSION Medical 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 PULSION Medical with a short position of SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PULSION Medical and SINGAPORE AIRLINES.
Diversification Opportunities for PULSION Medical and SINGAPORE AIRLINES
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between PULSION and SINGAPORE is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding PULSION Medical Systems and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES and PULSION Medical 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 PULSION Medical Systems 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 PULSION Medical i.e., PULSION Medical and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between PULSION Medical and SINGAPORE AIRLINES
Assuming the 90 days trading horizon PULSION Medical Systems is expected to under-perform the SINGAPORE AIRLINES. But the stock apears to be less risky and, when comparing its historical volatility, PULSION Medical Systems is 1.32 times less risky than SINGAPORE AIRLINES. The stock trades about -0.14 of its potential returns per unit of risk. The SINGAPORE AIRLINES is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 448.00 in SINGAPORE AIRLINES on October 12, 2024 and sell it today you would earn a total of 10.00 from holding SINGAPORE AIRLINES or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PULSION Medical Systems vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| PULSION Medical Systems |
| SINGAPORE AIRLINES |
PULSION Medical and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PULSION Medical and SINGAPORE AIRLINES
The main advantage of trading using opposite PULSION Medical and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PULSION Medical 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's long position.| PULSION Medical vs. COLUMBIA SPORTSWEAR | PULSION Medical vs. Tianjin Capital Environmental | PULSION Medical vs. NEW MILLENNIUM IRON | PULSION Medical vs. CALTAGIRONE EDITORE |
| SINGAPORE AIRLINES vs. OBSERVE MEDICAL ASA | SINGAPORE AIRLINES vs. IMAGIN MEDICAL INC | SINGAPORE AIRLINES vs. PULSION Medical Systems | SINGAPORE AIRLINES vs. Inspire Medical Systems |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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