Correlation Between Sonida Senior and Singapore Airlines

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

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

Diversification Opportunities for Sonida Senior and Singapore Airlines

0.44

Correlation Coefficient

Sonida Senior  Singapore Airlines

Very weak diversification

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

Pair Corralation between Sonida Senior and Singapore Airlines

Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the Singapore Airlines. In addition to that, Sonida Senior is 3.01 times more volatile than Singapore Airlines. It trades about -0.06 of its total potential returns per unit of risk. Singapore Airlines is currently generating about -0.07 per unit of volatility. If you would invest  961.00  in Singapore Airlines on October 26, 2024 and sell it today you would lose (34.00) from holding Singapore Airlines or give up 3.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Sonida Senior Living  vs.  Singapore Airlines

Sonida Senior Living

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sonida Senior Living has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.

Pair Trading with Sonida Senior and Singapore Airlines

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

The idea behind Sonida Senior Living and Singapore Airlines 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.