Correlation Between SunLink Health and NanoVibronix

Can any of the company-specific risk be diversified away by investing in both SunLink Health and NanoVibronix 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 NanoVibronix 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 NanoVibronix, you can compare the effects of market volatilities on SunLink Health and NanoVibronix 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 NanoVibronix. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and NanoVibronix.

Diversification Opportunities for SunLink Health and NanoVibronix

-0.42

Correlation Coefficient

SunLink Health  NanoVibronix

Very good diversification

The 3 months correlation between SunLink and NanoVibronix is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and NanoVibronix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoVibronix 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 NanoVibronix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoVibronix has no effect on the direction of SunLink Health i.e., SunLink Health and NanoVibronix go up and down completely randomly.

Pair Corralation between SunLink Health and NanoVibronix

Considering the 90-day investment horizon SunLink Health Systems is expected to generate 0.92 times more return on investment than NanoVibronix. However, SunLink Health Systems is 1.09 times less risky than NanoVibronix. It trades about 0.08 of its potential returns per unit of risk. NanoVibronix is currently generating about -0.09 per unit of risk. If you would invest  86.00  in SunLink Health Systems on November 28, 2024 and sell it today you would earn a total of  19.00  from holding SunLink Health Systems or generate 22.09% return on investment over 90 days.

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

SunLink Health Systems  vs.  NanoVibronix

SunLink Health Systems

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, SunLink Health showed solid returns over the last few months and may actually be approaching a breakup point.

NanoVibronix

Risk-Adjusted Performance

Very Weak

Over the last 90 days NanoVibronix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with SunLink Health and NanoVibronix

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

The idea behind SunLink Health Systems and NanoVibronix 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.