Correlation Between Café Serendipity and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Café Serendipity 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 Café Serendipity and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caf Serendipity Holdings and SunLink Health Systems, you can compare the effects of market volatilities on Café Serendipity 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 Café Serendipity with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Café Serendipity and SunLink Health.
Diversification Opportunities for Café Serendipity and SunLink Health
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Café and SunLink is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Caf Serendipity Holdings 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 Café Serendipity 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 Caf Serendipity Holdings 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 Café Serendipity i.e., Café Serendipity and SunLink Health go up and down completely randomly.
Pair Corralation between Café Serendipity and SunLink Health
Given the investment horizon of 90 days Caf Serendipity Holdings is expected to under-perform the SunLink Health. In addition to that, Café Serendipity is 2.24 times more volatile than SunLink Health Systems. It trades about -0.22 of its total potential returns per unit of risk. SunLink Health Systems is currently generating about 0.2 per unit of volatility. If you would invest 89.00 in SunLink Health Systems on November 28, 2024 and sell it today you would earn a total of 18.00 from holding SunLink Health Systems or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Caf Serendipity Holdings vs. SunLink Health Systems
Performance |
| Timeline |
| Caf Serendipity Holdings |
| SunLink Health Systems |
Café Serendipity and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Café Serendipity and SunLink Health
The main advantage of trading using opposite Café Serendipity and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Café Serendipity 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.| Café Serendipity vs. China Jo Jo Drugstores | Café Serendipity vs. SunLink Health Systems | Café Serendipity vs. PetMed Express |
| SunLink Health vs. Allstar Health Brands | SunLink Health vs. Kiaro Holdings Corp | SunLink Health vs. China Jo Jo Drugstores | SunLink Health vs. PetMed Express |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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