Correlation Between Outset Medical and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Outset Medical 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 Outset Medical and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and SunLink Health Systems, you can compare the effects of market volatilities on Outset Medical 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 Outset Medical with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and SunLink Health.
Diversification Opportunities for Outset Medical and SunLink Health
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Outset and SunLink is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical 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 Outset Medical 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 Outset Medical 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 Outset Medical i.e., Outset Medical and SunLink Health go up and down completely randomly.
Pair Corralation between Outset Medical and SunLink Health
Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the SunLink Health. But the stock apears to be less risky and, when comparing its historical volatility, Outset Medical is 1.83 times less risky than SunLink Health. The stock trades about -0.13 of its potential returns per unit of risk. The SunLink Health Systems is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 76.00 in SunLink Health Systems on October 13, 2024 and sell it today you would earn a total of 18.00 from holding SunLink Health Systems or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outset Medical vs. SunLink Health Systems
Performance |
| Timeline |
| Outset Medical |
| SunLink Health Systems |
Outset Medical and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and SunLink Health
The main advantage of trading using opposite Outset Medical and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical 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.| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro Corp |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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