Correlation Between Supercom and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Supercom 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 Supercom and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and SunLink Health Systems, you can compare the effects of market volatilities on Supercom 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 Supercom with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and SunLink Health.
Diversification Opportunities for Supercom and SunLink Health
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Supercom and SunLink is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Supercom 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 Supercom 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 Supercom 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 Supercom i.e., Supercom and SunLink Health go up and down completely randomly.
Pair Corralation between Supercom and SunLink Health
Given the investment horizon of 90 days Supercom is expected to generate 1.11 times more return on investment than SunLink Health. However, Supercom is 1.11 times more volatile than SunLink Health Systems. It trades about 0.03 of its potential returns per unit of risk. SunLink Health Systems is currently generating about -0.16 per unit of risk. If you would invest 343.00 in Supercom on August 30, 2024 and sell it today you would earn a total of 5.00 from holding Supercom or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. SunLink Health Systems
Performance |
| Timeline |
| Supercom |
| SunLink Health Systems |
Supercom and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and SunLink Health
The main advantage of trading using opposite Supercom and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom 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.| Supercom vs. Fabrinet | Supercom vs. Knowles Cor | Supercom vs. Ubiquiti Networks | Supercom vs. AmpliTech Group |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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