Correlation Between Singapore Airlines and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and SHIP HEALTHCARE 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 Singapore Airlines and SHIP HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Airlines Limited and SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Singapore Airlines and SHIP HEALTHCARE 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 Singapore Airlines with a short position of SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and SHIP HEALTHCARE.
Diversification Opportunities for Singapore Airlines and SHIP HEALTHCARE
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Singapore and SHIP is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and Singapore Airlines 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 Singapore Airlines Limited are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between Singapore Airlines and SHIP HEALTHCARE
Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.68 times more return on investment than SHIP HEALTHCARE. However, Singapore Airlines Limited is 1.47 times less risky than SHIP HEALTHCARE. It trades about 0.04 of its potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about 0.0 per unit of risk. If you would invest 418.00 in Singapore Airlines Limited on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Singapore Airlines Limited or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Airlines Limited vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| Singapore Airlines |
| SHIP HEALTHCARE HLDGINC |
Singapore Airlines and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and SHIP HEALTHCARE
The main advantage of trading using opposite Singapore Airlines and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, SHIP HEALTHCARE 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.| Singapore Airlines vs. Delta Air Lines | Singapore Airlines vs. AIR CHINA LTD | Singapore Airlines vs. RYANAIR HLDGS ADR | Singapore Airlines vs. Southwest Airlines Co |
| SHIP HEALTHCARE vs. DEVRY EDUCATION GRP | SHIP HEALTHCARE vs. Titan Machinery | SHIP HEALTHCARE vs. CHINA EDUCATION GROUP | SHIP HEALTHCARE vs. United Utilities Group |
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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