Correlation Between SunLink Health and Brenmiller Energy

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

Diversification Opportunities for SunLink Health and Brenmiller Energy

0.61

Correlation Coefficient

SunLink Health  Brenmiller Energy

Poor diversification

The 3 months correlation between SunLink and Brenmiller is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy 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 Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of SunLink Health i.e., SunLink Health and Brenmiller Energy go up and down completely randomly.

Pair Corralation between SunLink Health and Brenmiller Energy

Considering the 90-day investment horizon SunLink Health Systems is expected to generate 1.05 times more return on investment than Brenmiller Energy. However, SunLink Health is 1.05 times more volatile than Brenmiller Energy Ltd. It trades about -0.02 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about -0.03 per unit of risk. If you would invest  87.00  in SunLink Health Systems on September 23, 2024 and sell it today you would lose (10.00) from holding SunLink Health Systems or give up 11.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SunLink Health Systems  vs.  Brenmiller Energy Ltd

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.

Brenmiller Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brenmiller Energy Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SunLink Health and Brenmiller Energy

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

The idea behind SunLink Health Systems and Brenmiller Energy Ltd 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.