Correlation Between 111 and SunLink Health

Can any of the company-specific risk be diversified away by investing in both 111 and SunLink Health 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 111 and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 111 Inc and SunLink Health Systems, you can compare the effects of market volatilities on 111 and SunLink Health 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 111 with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of 111 and SunLink Health.

Diversification Opportunities for 111 and SunLink Health

0.02

Correlation Coefficient

111  SunLink Health

Significant diversification

The 3 months correlation between 111 and SunLink is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding 111 Inc and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems and 111 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 111 Inc are associated (or correlated) with SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of 111 i.e., 111 and SunLink Health go up and down completely randomly.

Pair Corralation between 111 and SunLink Health

Allowing for the 90-day total investment horizon 111 Inc is expected to generate 1.9 times more return on investment than SunLink Health. However, 111 is 1.9 times more volatile than SunLink Health Systems. It trades about 0.08 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.03 per unit of risk. If you would invest  65.00  in 111 Inc on September 17, 2024 and sell it today you would earn a total of  18.00  from holding 111 Inc or generate 27.69% return on investment over 90 days.

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

111 Inc  vs.  SunLink Health Systems

111 Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 111 Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, 111 demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SunLink Health Systems

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, SunLink Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 111 and SunLink Health

The main advantage of trading using opposite 111 and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 111 position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health's long position.

The idea behind 111 Inc and SunLink Health Systems 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.