Correlation Between Prime Lands and Singhe Hospitals

Can any of the company-specific risk be diversified away by investing in both Prime Lands and Singhe Hospitals 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 Prime Lands and Singhe Hospitals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prime Lands Residencies and Singhe Hospitals, you can compare the effects of market volatilities on Prime Lands and Singhe Hospitals 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 Prime Lands with a short position of Singhe Hospitals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Lands and Singhe Hospitals.

Diversification Opportunities for Prime Lands and Singhe Hospitals

0.44

Correlation Coefficient

Prime Lands  Singhe Hospitals

Very weak diversification

The 3 months correlation between Prime and Singhe is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Prime Lands Residencies and Singhe Hospitals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singhe Hospitals and Prime Lands 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 Prime Lands Residencies are associated (or correlated) with Singhe Hospitals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singhe Hospitals has no effect on the direction of Prime Lands i.e., Prime Lands and Singhe Hospitals go up and down completely randomly.

Pair Corralation between Prime Lands and Singhe Hospitals

Assuming the 90 days trading horizon Prime Lands Residencies is expected to generate 0.79 times more return on investment than Singhe Hospitals. However, Prime Lands Residencies is 1.27 times less risky than Singhe Hospitals. It trades about 0.19 of its potential returns per unit of risk. Singhe Hospitals is currently generating about 0.05 per unit of risk. If you would invest  800.00  in Prime Lands Residencies on October 8, 2024 and sell it today you would earn a total of  590.00  from holding Prime Lands Residencies or generate 73.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.17%
Values	Daily Returns

Prime Lands Residencies  vs.  Singhe Hospitals

Prime Lands Residencies

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Prime Lands Residencies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Prime Lands sustained solid returns over the last few months and may actually be approaching a breakup point.

Singhe Hospitals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Singhe Hospitals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Singhe Hospitals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Prime Lands and Singhe Hospitals

The main advantage of trading using opposite Prime Lands and Singhe Hospitals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Lands position performs unexpectedly, Singhe Hospitals 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 Singhe Hospitals will offset losses from the drop in Singhe Hospitals' long position.

The idea behind Prime Lands Residencies and Singhe Hospitals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.