Correlation Between SunLink Health and Franklin Street
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Franklin Street 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 SunLink Health and Franklin Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunLink Health Systems and Franklin Street Properties, you can compare the effects of market volatilities on SunLink Health and Franklin Street 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 SunLink Health with a short position of Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Franklin Street.
Diversification Opportunities for SunLink Health and Franklin Street
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SunLink and Franklin is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Franklin Street Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Street Prop and SunLink 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 SunLink Health Systems are associated (or correlated) with Franklin Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Street Prop has no effect on the direction of SunLink Health i.e., SunLink Health and Franklin Street go up and down completely randomly.
Pair Corralation between SunLink Health and Franklin Street
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 1.36 times more return on investment than Franklin Street. However, SunLink Health is 1.36 times more volatile than Franklin Street Properties. It trades about 0.03 of its potential returns per unit of risk. Franklin Street Properties is currently generating about 0.0 per unit of risk. If you would invest 61.00 in SunLink Health Systems on September 23, 2024 and sell it today you would earn a total of 16.00 from holding SunLink Health Systems or generate 26.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SunLink Health Systems vs. Franklin Street Properties
Performance |
Timeline |
SunLink Health Systems |
Franklin Street Prop |
SunLink Health and Franklin Street Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SunLink Health and Franklin Street
The main advantage of trading using opposite SunLink Health and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Franklin Street 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 Franklin Street will offset losses from the drop in Franklin Street's long position.SunLink Health vs. Cigna Corp | SunLink Health vs. Definitive Healthcare Corp | SunLink Health vs. Edwards Lifesciences Corp | SunLink Health vs. Guardant Health |
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Check out your portfolio center.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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