Correlation Between Vulcan Steel and Singular Health
Can any of the company-specific risk be diversified away by investing in both Vulcan Steel 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 Vulcan Steel and Singular Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Steel and Singular Health Group, you can compare the effects of market volatilities on Vulcan Steel 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 Vulcan Steel with a short position of Singular Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Steel and Singular Health.
Diversification Opportunities for Vulcan Steel and Singular Health
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vulcan and Singular is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Steel 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 Vulcan Steel 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 Vulcan Steel 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 Vulcan Steel i.e., Vulcan Steel and Singular Health go up and down completely randomly.
Pair Corralation between Vulcan Steel and Singular Health
Assuming the 90 days trading horizon Vulcan Steel is expected to under-perform the Singular Health. But the stock apears to be less risky and, when comparing its historical volatility, Vulcan Steel is 1.89 times less risky than Singular Health. The stock trades about -0.01 of its potential returns per unit of risk. The Singular Health Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 8.70 in Singular Health Group on August 28, 2024 and sell it today you would earn a total of 3.30 from holding Singular Health Group or generate 37.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Steel vs. Singular Health Group
Performance |
| Timeline |
| Vulcan Steel |
| Singular Health Group |
Vulcan Steel and Singular Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Steel and Singular Health
The main advantage of trading using opposite Vulcan Steel and Singular Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Steel 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.| Vulcan Steel vs. Retail Food Group | Vulcan Steel vs. Argo Investments | Vulcan Steel vs. MFF Capital Investments | Vulcan Steel vs. A1 Investments Resources |
| Singular Health vs. Vulcan Steel | Singular Health vs. Hotel Property Investments | Singular Health vs. The Environmental Group | Singular Health vs. Regal Investment |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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