Correlation Between Singapore Airlines and HEALTHCARE TRPFD

Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and HEALTHCARE TRPFD 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 HEALTHCARE TRPFD 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 HEALTHCARE TRPFD SH, you can compare the effects of market volatilities on Singapore Airlines and HEALTHCARE TRPFD 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 HEALTHCARE TRPFD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and HEALTHCARE TRPFD.

Diversification Opportunities for Singapore Airlines and HEALTHCARE TRPFD

-0.35

Correlation Coefficient

Singapore Airlines  HEALTHCARE TRPFD

Very good diversification

The 3 months correlation between Singapore and HEALTHCARE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and HEALTHCARE TRPFD SH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE TRPFD 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 HEALTHCARE TRPFD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE TRPFD has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and HEALTHCARE TRPFD go up and down completely randomly.

Pair Corralation between Singapore Airlines and HEALTHCARE TRPFD

Assuming the 90 days trading horizon Singapore Airlines Limited is expected to generate 0.33 times more return on investment than HEALTHCARE TRPFD. However, Singapore Airlines Limited is 3.06 times less risky than HEALTHCARE TRPFD. It trades about 0.13 of its potential returns per unit of risk. HEALTHCARE TRPFD SH is currently generating about -0.28 per unit of risk. If you would invest  442.00  in Singapore Airlines Limited on September 27, 2024 and sell it today you would earn a total of  7.00  from holding Singapore Airlines Limited or generate 1.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Singapore Airlines Limited  vs.  HEALTHCARE TRPFD SH

Singapore Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singapore Airlines Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Singapore Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

HEALTHCARE TRPFD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEALTHCARE TRPFD SH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HEALTHCARE TRPFD is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Singapore Airlines and HEALTHCARE TRPFD

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

The idea behind Singapore Airlines Limited and HEALTHCARE TRPFD SH 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.