Correlation Between SunLink Health and Mid Atlantic

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

Diversification Opportunities for SunLink Health and Mid Atlantic

0.0

Correlation Coefficient

SunLink Health  Mid Atlantic

Pay attention - limited upside

The 3 months correlation between SunLink and Mid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Mid Atlantic Home Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Atlantic Home 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 Mid Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Atlantic Home has no effect on the direction of SunLink Health i.e., SunLink Health and Mid Atlantic go up and down completely randomly.

Pair Corralation between SunLink Health and Mid Atlantic

If you would invest  74.00  in SunLink Health Systems on September 15, 2024 and sell it today you would earn a total of  2.00  from holding SunLink Health Systems or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SunLink Health Systems  vs.  Mid Atlantic Home Health

SunLink Health Systems

Risk-Adjusted Performance

0 of 100

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.

Mid Atlantic Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mid Atlantic Home Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Mid Atlantic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SunLink Health and Mid Atlantic

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

The idea behind SunLink Health Systems and Mid Atlantic Home Health 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.