Correlation Between Franklin Street and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Franklin Street 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 Franklin Street and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and SunLink Health Systems, you can compare the effects of market volatilities on Franklin Street 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 Franklin Street with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and SunLink Health.
Diversification Opportunities for Franklin Street and SunLink Health
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and SunLink is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties 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 Franklin Street 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 Franklin Street Properties 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 Franklin Street i.e., Franklin Street and SunLink Health go up and down completely randomly.
Pair Corralation between Franklin Street and SunLink Health
Considering the 90-day investment horizon Franklin Street Properties is expected to generate 0.9 times more return on investment than SunLink Health. However, Franklin Street Properties is 1.11 times less risky than SunLink Health. It trades about 0.11 of its potential returns per unit of risk. SunLink Health Systems is currently generating about -0.18 per unit of risk. If you would invest 180.00 in Franklin Street Properties on August 27, 2024 and sell it today you would earn a total of 14.00 from holding Franklin Street Properties or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. SunLink Health Systems
Performance |
| Timeline |
| Franklin Street Prop |
| SunLink Health Systems |
Franklin Street and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and SunLink Health
The main advantage of trading using opposite Franklin Street and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street 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.| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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