Correlation Between Singapore Airlines and Aperture Health

Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and Aperture 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 Singapore Airlines and Aperture Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Singapore Airlines and Aperture Health, you can compare the effects of market volatilities on Singapore Airlines and Aperture 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 Singapore Airlines with a short position of Aperture Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and Aperture Health.

Diversification Opportunities for Singapore Airlines and Aperture Health

0.0

Correlation Coefficient

Singapore Airlines  Aperture Health

Pay attention - limited upside

The 3 months correlation between Singapore and Aperture is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines and Aperture Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aperture Health 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 are associated (or correlated) with Aperture Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aperture Health has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and Aperture Health go up and down completely randomly.

Pair Corralation between Singapore Airlines and Aperture Health

Assuming the 90 days horizon Singapore Airlines is expected to generate 12.17 times less return on investment than Aperture Health. But when comparing it to its historical volatility, Singapore Airlines is 11.33 times less risky than Aperture Health. It trades about 0.03 of its potential returns per unit of risk. Aperture Health is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Aperture Health on October 26, 2024 and sell it today you would lose (6.10) from holding Aperture Health or give up 50.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Singapore Airlines  vs.  Aperture Health

Singapore Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singapore Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Singapore Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aperture Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aperture Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Aperture Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Singapore Airlines and Aperture Health

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

The idea behind Singapore Airlines and Aperture Health 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.