Correlation Between Singular Health and Boss Energy

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

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

Diversification Opportunities for Singular Health and Boss Energy

-0.59

Correlation Coefficient

Singular Health  Boss Energy

Excellent diversification

The 3 months correlation between Singular and Boss is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Singular Health Group and Boss Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss Energy Limited and Singular Health 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 Health Group are associated (or correlated) with Boss Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Energy Limited has no effect on the direction of Singular Health i.e., Singular Health and Boss Energy go up and down completely randomly.

Pair Corralation between Singular Health and Boss Energy

Assuming the 90 days trading horizon Singular Health Group is expected to generate 1.73 times more return on investment than Boss Energy. However, Singular Health is 1.73 times more volatile than Boss Energy Limited. It trades about 0.16 of its potential returns per unit of risk. Boss Energy Limited is currently generating about -0.04 per unit of risk. If you would invest  8.70  in Singular Health Group on September 12, 2024 and sell it today you would earn a total of  5.30  from holding Singular Health Group or generate 60.92% return on investment over 90 days.

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

Singular Health Group  vs.  Boss Energy Limited

Singular Health Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singular Health Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Singular Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Boss Energy Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boss Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Singular Health and Boss Energy

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

The idea behind Singular Health Group and Boss Energy Limited 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.