Correlation Between 70082LAB3 and SunLink Health

Can any of the company-specific risk be diversified away by investing in both 70082LAB3 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 70082LAB3 and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US70082LAB36 and SunLink Health Systems, you can compare the effects of market volatilities on 70082LAB3 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 70082LAB3 with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of 70082LAB3 and SunLink Health.

Diversification Opportunities for 70082LAB3 and SunLink Health

-0.33

Correlation Coefficient

70082LAB3  SunLink Health

Very good diversification

The 3 months correlation between 70082LAB3 and SunLink is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding US70082LAB36 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 70082LAB3 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 US70082LAB36 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 70082LAB3 i.e., 70082LAB3 and SunLink Health go up and down completely randomly.

Pair Corralation between 70082LAB3 and SunLink Health

Assuming the 90 days trading horizon US70082LAB36 is expected to under-perform the SunLink Health. But the bond apears to be less risky and, when comparing its historical volatility, US70082LAB36 is 2.61 times less risky than SunLink Health. The bond trades about -0.04 of its potential returns per unit of risk. The SunLink Health Systems is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  79.00  in SunLink Health Systems on September 22, 2024 and sell it today you would lose (2.00) from holding SunLink Health Systems or give up 2.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.19%
Values	Daily Returns

US70082LAB36  vs.  SunLink Health Systems

US70082LAB36

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in US70082LAB36 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 70082LAB3 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 fairly strong basic indicators, SunLink Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 70082LAB3 and SunLink Health

The main advantage of trading using opposite 70082LAB3 and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 70082LAB3 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 US70082LAB36 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.