Correlation Between Singularity Future and Air T

Can any of the company-specific risk be diversified away by investing in both Singularity Future and Air T 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 Singularity Future and Air T into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Singularity Future Technology and Air T Inc, you can compare the effects of market volatilities on Singularity Future and Air T 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 Singularity Future with a short position of Air T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singularity Future and Air T.

Diversification Opportunities for Singularity Future and Air T

-0.32

Correlation Coefficient

Singularity Future  Air T

Very good diversification

The 3 months correlation between Singularity and Air is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Singularity Future Technology and Air T Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air T Inc and Singularity Future 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 Singularity Future Technology are associated (or correlated) with Air T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air T Inc has no effect on the direction of Singularity Future i.e., Singularity Future and Air T go up and down completely randomly.

Pair Corralation between Singularity Future and Air T

Given the investment horizon of 90 days Singularity Future Technology is expected to generate 6.02 times more return on investment than Air T. However, Singularity Future is 6.02 times more volatile than Air T Inc. It trades about 0.01 of its potential returns per unit of risk. Air T Inc is currently generating about -0.01 per unit of risk. If you would invest  453.00  in Singularity Future Technology on March 5, 2024 and sell it today you would lose (17.00) from holding Singularity Future Technology or give up 3.75% of portfolio value over 90 days.

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

Singularity Future Technology  vs.  Air T Inc

Singularity Future

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singularity Future Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Singularity Future showed solid returns over the last few months and may actually be approaching a breakup point.

Air T Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air T Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Air T is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Singularity Future and Air T

The main advantage of trading using opposite Singularity Future and Air T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singularity Future position performs unexpectedly, Air T 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 Air T will offset losses from the drop in Air T's long position.

The idea behind Singularity Future Technology and Air T Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.