Correlation Between Singular Genomics and Air New

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

By analyzing existing cross correlation between Singular Genomics Systems and Air New Zealand, you can compare the effects of market volatilities on Singular Genomics and Air New 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 Singular Genomics with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singular Genomics and Air New.

Diversification Opportunities for Singular Genomics and Air New

-0.53

Correlation Coefficient

Singular Genomics  Air New

Excellent diversification

The 3 months correlation between Singular and Air is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Singular Genomics Systems and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand and Singular Genomics 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 Singular Genomics Systems are associated (or correlated) with Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Singular Genomics i.e., Singular Genomics and Air New go up and down completely randomly.

Pair Corralation between Singular Genomics and Air New

Given the investment horizon of 90 days Singular Genomics Systems is expected to under-perform the Air New. But the stock apears to be less risky and, when comparing its historical volatility, Singular Genomics Systems is 2.7 times less risky than Air New. The stock trades about -0.21 of its potential returns per unit of risk. The Air New Zealand is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Air New Zealand on September 12, 2024 and sell it today you would earn a total of  3.00  from holding Air New Zealand or generate 10.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Singular Genomics Systems  vs.  Air New Zealand

Singular Genomics Systems

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singular Genomics Systems are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Singular Genomics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Air New Zealand

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Air New Zealand are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Air New may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Singular Genomics and Air New

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

The idea behind Singular Genomics Systems and Air New Zealand 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.