Correlation Between SunLink Health and Analog Devices

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Analog Devices 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 Analog Devices 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 Analog Devices, you can compare the effects of market volatilities on SunLink Health and Analog Devices 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 Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Analog Devices.

Diversification Opportunities for SunLink Health and Analog Devices

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between SunLink and Analog is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices 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 Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of SunLink Health i.e., SunLink Health and Analog Devices go up and down completely randomly.

Pair Corralation between SunLink Health and Analog Devices

Considering the 90-day investment horizon SunLink Health is expected to generate 1.3 times less return on investment than Analog Devices. In addition to that, SunLink Health is 2.8 times more volatile than Analog Devices. It trades about 0.0 of its total potential returns per unit of risk. Analog Devices is currently generating about 0.02 per unit of volatility. If you would invest  21,760  in Analog Devices on September 6, 2024 and sell it today you would earn a total of  70.00  from holding Analog Devices or generate 0.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SunLink Health Systems  vs.  Analog Devices

 Performance 
       Timeline  
SunLink Health Systems 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 4 (%) 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.
Analog Devices 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Analog Devices is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

SunLink Health and Analog Devices Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SunLink Health and Analog Devices

The main advantage of trading using opposite SunLink Health and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.
The idea behind SunLink Health Systems and Analog Devices 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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Bonds Directory
Find actively traded corporate debentures issued by US companies
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities