Correlation Between INTNED and SunLink Health

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

By analyzing existing cross correlation between INTNED 575 and SunLink Health Systems, you can compare the effects of market volatilities on INTNED and SunLink Health 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 INTNED with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and SunLink Health.

Diversification Opportunities for INTNED and SunLink Health

0.36

Correlation Coefficient

INTNED  SunLink Health

Weak diversification

The 3 months correlation between INTNED and SunLink is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 575 and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems and INTNED 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 INTNED 575 are associated (or correlated) with SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of INTNED i.e., INTNED and SunLink Health go up and down completely randomly.

Pair Corralation between INTNED and SunLink Health

Assuming the 90 days trading horizon INTNED 575 is expected to generate 0.22 times more return on investment than SunLink Health. However, INTNED 575 is 4.63 times less risky than SunLink Health. It trades about -0.18 of its potential returns per unit of risk. SunLink Health Systems is currently generating about -0.06 per unit of risk. If you would invest  9,920  in INTNED 575 on September 21, 2024 and sell it today you would lose (395.00) from holding INTNED 575 or give up 3.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	53.49%
Values	Daily Returns

INTNED 575  vs.  SunLink Health Systems

INTNED 575

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SunLink Health Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SunLink Health Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with INTNED and SunLink Health

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

The idea behind INTNED 575 and SunLink Health Systems 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.