Correlation Between Trxade and SunLink Health

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

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

Diversification Opportunities for Trxade and SunLink Health

-0.35

Correlation Coefficient

Trxade  SunLink Health

Very good diversification

The 3 months correlation between Trxade and SunLink is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Trxade Group 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 Trxade 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 Trxade Group 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 Trxade i.e., Trxade and SunLink Health go up and down completely randomly.

Pair Corralation between Trxade and SunLink Health

Given the investment horizon of 90 days Trxade Group is expected to under-perform the SunLink Health. In addition to that, Trxade is 1.06 times more volatile than SunLink Health Systems. It trades about -0.05 of its total potential returns per unit of risk. SunLink Health Systems is currently generating about -0.01 per unit of volatility. If you would invest  80.00  in SunLink Health Systems on August 30, 2024 and sell it today you would lose (5.00) from holding SunLink Health Systems or give up 6.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	32.81%
Values	Daily Returns

Trxade Group  vs.  SunLink Health Systems

Trxade Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trxade Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's 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.

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 Trxade and SunLink Health

The main advantage of trading using opposite Trxade and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trxade 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 Trxade Group 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.