Correlation Between SunLink Health and Vystar Corp

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

Diversification Opportunities for SunLink Health and Vystar Corp

-0.22

Correlation Coefficient

SunLink Health  Vystar Corp

Very good diversification

The 3 months correlation between SunLink and Vystar is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Vystar Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vystar Corp 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 Vystar Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vystar Corp has no effect on the direction of SunLink Health i.e., SunLink Health and Vystar Corp go up and down completely randomly.

Pair Corralation between SunLink Health and Vystar Corp

Considering the 90-day investment horizon SunLink Health is expected to generate 410.74 times less return on investment than Vystar Corp. But when comparing it to its historical volatility, SunLink Health Systems is 13.42 times less risky than Vystar Corp. It trades about 0.0 of its potential returns per unit of risk. Vystar Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  6.60  in Vystar Corp on September 12, 2024 and sell it today you would lose (4.50) from holding Vystar Corp or give up 68.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

SunLink Health Systems  vs.  Vystar Corp

SunLink Health Systems

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, SunLink Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vystar Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vystar Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Vystar Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SunLink Health and Vystar Corp

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

The idea behind SunLink Health Systems and Vystar Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.