Correlation Between National Beverage and SunLink Health
Can any of the company-specific risk be diversified away by investing in both National Beverage 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 National Beverage and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and SunLink Health Systems, you can compare the effects of market volatilities on National Beverage 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 National Beverage with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and SunLink Health.
Diversification Opportunities for National Beverage and SunLink Health
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and SunLink is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp 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 National Beverage 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 National Beverage Corp 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 National Beverage i.e., National Beverage and SunLink Health go up and down completely randomly.
Pair Corralation between National Beverage and SunLink Health
Given the investment horizon of 90 days National Beverage is expected to generate 4.21 times less return on investment than SunLink Health. But when comparing it to its historical volatility, National Beverage Corp is 2.45 times less risky than SunLink Health. It trades about 0.02 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 67.00 in SunLink Health Systems on September 12, 2024 and sell it today you would earn a total of 8.00 from holding SunLink Health Systems or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. SunLink Health Systems
Performance |
| Timeline |
| National Beverage Corp |
| SunLink Health Systems |
National Beverage and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and SunLink Health
The main advantage of trading using opposite National Beverage and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage 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.| National Beverage vs. Celsius Holdings | National Beverage vs. Monster Beverage Corp | National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper |
| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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