Correlation Between Singular Health and Air New
Can any of the company-specific risk be diversified away by investing in both Singular Health and Air New 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 Singular Health and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singular Health Group and Air New Zealand, you can compare the effects of market volatilities on Singular Health and Air New 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 Singular Health with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singular Health and Air New.
Diversification Opportunities for Singular Health and Air New
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singular and Air is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Singular Health Group and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand and Singular 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 Singular Health Group are associated (or correlated) with Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Singular Health i.e., Singular Health and Air New go up and down completely randomly.
Pair Corralation between Singular Health and Air New
Assuming the 90 days trading horizon Singular Health Group is expected to generate 5.34 times more return on investment than Air New. However, Singular Health is 5.34 times more volatile than Air New Zealand. It trades about 0.03 of its potential returns per unit of risk. Air New Zealand is currently generating about -0.02 per unit of risk. If you would invest 14.00 in Singular Health Group on August 30, 2024 and sell it today you would lose (2.00) from holding Singular Health Group or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singular Health Group vs. Air New Zealand
Performance |
| Timeline |
| Singular Health Group |
| Air New Zealand |
Singular Health and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singular Health and Air New
The main advantage of trading using opposite Singular Health and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singular Health position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Singular Health vs. Westpac Banking | Singular Health vs. Champion Iron | Singular Health vs. Ridley | Singular Health vs. Peel Mining |
| Air New vs. Aneka Tambang Tbk | Air New vs. ANZ Group Holdings | Air New vs. Australia and New | Air New vs. Commonwealth Bank |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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