Correlation Between SunLink Health and 053807AU7

Can any of the company-specific risk be diversified away by investing in both SunLink Health and 053807AU7 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 053807AU7 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 AVT 3 15 MAY 31, you can compare the effects of market volatilities on SunLink Health and 053807AU7 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 053807AU7. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and 053807AU7.

Diversification Opportunities for SunLink Health and 053807AU7

0.32

Correlation Coefficient

SunLink Health  053807AU7

Weak diversification

The 3 months correlation between SunLink and 053807AU7 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and AVT 3 15 MAY 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 053807AU7 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 053807AU7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 053807AU7 has no effect on the direction of SunLink Health i.e., SunLink Health and 053807AU7 go up and down completely randomly.

Pair Corralation between SunLink Health and 053807AU7

Considering the 90-day investment horizon SunLink Health Systems is expected to generate 3.26 times more return on investment than 053807AU7. However, SunLink Health is 3.26 times more volatile than AVT 3 15 MAY 31. It trades about 0.1 of its potential returns per unit of risk. AVT 3 15 MAY 31 is currently generating about -0.17 per unit of risk. If you would invest  90.00  in SunLink Health Systems on September 27, 2024 and sell it today you would earn a total of  25.09  from holding SunLink Health Systems or generate 27.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	67.44%
Values	Daily Returns

SunLink Health Systems  vs.  AVT 3 15 MAY 31

SunLink Health Systems

Risk-Adjusted Performance

7 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, SunLink Health showed solid returns over the last few months and may actually be approaching a breakup point.

053807AU7

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AVT 3 15 MAY 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for AVT 3 15 MAY 31 investors.

Pair Trading with SunLink Health and 053807AU7

The main advantage of trading using opposite SunLink Health and 053807AU7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, 053807AU7 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 053807AU7 will offset losses from the drop in 053807AU7's long position.

The idea behind SunLink Health Systems and AVT 3 15 MAY 31 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.