Correlation Between ZOZO and SunLink Health
Can any of the company-specific risk be diversified away by investing in both ZOZO 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 ZOZO and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZOZO Inc and SunLink Health Systems, you can compare the effects of market volatilities on ZOZO 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 ZOZO with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZOZO and SunLink Health.
Diversification Opportunities for ZOZO and SunLink Health
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZOZO and SunLink is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ZOZO 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 ZOZO 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 ZOZO 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 ZOZO i.e., ZOZO and SunLink Health go up and down completely randomly.
Pair Corralation between ZOZO and SunLink Health
Assuming the 90 days horizon ZOZO Inc is expected to generate 0.75 times more return on investment than SunLink Health. However, ZOZO Inc is 1.33 times less risky than SunLink Health. It trades about 0.41 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.05 per unit of risk. If you would invest 2,367 in ZOZO Inc on September 3, 2024 and sell it today you would earn a total of 993.00 from holding ZOZO Inc or generate 41.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 17.6% |
| Values | Daily Returns |
ZOZO Inc vs. SunLink Health Systems
Performance |
| Timeline |
| ZOZO Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| SunLink Health Systems |
ZOZO and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZOZO and SunLink Health
The main advantage of trading using opposite ZOZO and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZOZO 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.| ZOZO vs. TSS, Common Stock | ZOZO vs. Aquagold International | ZOZO vs. Morningstar Unconstrained Allocation | ZOZO vs. High Yield Municipal Fund |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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