Correlation Between Marine Products and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Marine Products 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 Marine Products and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and SunLink Health Systems, you can compare the effects of market volatilities on Marine Products 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 Marine Products with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and SunLink Health.
Diversification Opportunities for Marine Products and SunLink Health
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marine and SunLink is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products 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 Marine Products 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 Marine Products 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 Marine Products i.e., Marine Products and SunLink Health go up and down completely randomly.
Pair Corralation between Marine Products and SunLink Health
Considering the 90-day investment horizon Marine Products is expected to generate 0.37 times more return on investment than SunLink Health. However, Marine Products is 2.72 times less risky than SunLink Health. It trades about 0.18 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.06 per unit of risk. If you would invest 928.00 in Marine Products on September 2, 2024 and sell it today you would earn a total of 61.00 from holding Marine Products or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. SunLink Health Systems
Performance |
| Timeline |
| Marine Products |
| SunLink Health Systems |
Marine Products and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and SunLink Health
The main advantage of trading using opposite Marine Products and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products 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.| Marine Products vs. LCI Industries | Marine Products vs. MCBC Holdings | Marine Products vs. Winnebago Industries | Marine Products vs. Thor Industries |
| SunLink Health vs. Humana Inc | SunLink Health vs. Cigna Corp | SunLink Health vs. Elevance Health | SunLink Health vs. Centene 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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