Correlation Between Middlefield Banc and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Middlefield Banc 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 Middlefield Banc and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middlefield Banc and SunLink Health Systems, you can compare the effects of market volatilities on Middlefield Banc 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 Middlefield Banc with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middlefield Banc and SunLink Health.
Diversification Opportunities for Middlefield Banc and SunLink Health
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Middlefield and SunLink is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Banc 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 Middlefield Banc 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 Middlefield Banc 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 Middlefield Banc i.e., Middlefield Banc and SunLink Health go up and down completely randomly.
Pair Corralation between Middlefield Banc and SunLink Health
Given the investment horizon of 90 days Middlefield Banc is expected to generate 0.81 times more return on investment than SunLink Health. However, Middlefield Banc is 1.23 times less risky than SunLink Health. It trades about 0.15 of its potential returns per unit of risk. SunLink Health Systems is currently generating about -0.19 per unit of risk. If you would invest 2,800 in Middlefield Banc on August 29, 2024 and sell it today you would earn a total of 274.00 from holding Middlefield Banc or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Middlefield Banc vs. SunLink Health Systems
Performance |
| Timeline |
| Middlefield Banc |
| SunLink Health Systems |
Middlefield Banc and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Middlefield Banc and SunLink Health
The main advantage of trading using opposite Middlefield Banc and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlefield Banc 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.| Middlefield Banc vs. Home Federal Bancorp | Middlefield Banc vs. First Northwest Bancorp | Middlefield Banc vs. Lake Shore Bancorp | Middlefield Banc vs. Community West Bancshares |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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