Correlation Between Funko and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Funko 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 Funko and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and SunLink Health Systems, you can compare the effects of market volatilities on Funko 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 Funko with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and SunLink Health.
Diversification Opportunities for Funko and SunLink Health
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Funko and SunLink is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Funko 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 Funko 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 Funko 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 Funko i.e., Funko and SunLink Health go up and down completely randomly.
Pair Corralation between Funko and SunLink Health
Given the investment horizon of 90 days Funko Inc is expected to under-perform the SunLink Health. But the stock apears to be less risky and, when comparing its historical volatility, Funko Inc is 2.45 times less risky than SunLink Health. The stock trades about -0.12 of its potential returns per unit of risk. The SunLink Health Systems is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 89.00 in SunLink Health Systems on November 28, 2024 and sell it today you would earn a total of 16.00 from holding SunLink Health Systems or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Funko Inc vs. SunLink Health Systems
Performance |
| Timeline |
| Funko Inc |
| SunLink Health Systems |
Funko and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and SunLink Health
The main advantage of trading using opposite Funko and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko 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 Funko 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.| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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