Correlation Between SunLink Health and Bt Brands
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Bt Brands 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 SunLink Health and Bt Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunLink Health Systems and Bt Brands, you can compare the effects of market volatilities on SunLink Health and Bt Brands 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 SunLink Health with a short position of Bt Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Bt Brands.
Diversification Opportunities for SunLink Health and Bt Brands
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunLink and BTBD is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Bt Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bt Brands and SunLink Health 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 SunLink Health Systems are associated (or correlated) with Bt Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bt Brands has no effect on the direction of SunLink Health i.e., SunLink Health and Bt Brands go up and down completely randomly.
Pair Corralation between SunLink Health and Bt Brands
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 1.05 times more return on investment than Bt Brands. However, SunLink Health is 1.05 times more volatile than Bt Brands. It trades about 0.05 of its potential returns per unit of risk. Bt Brands is currently generating about 0.05 per unit of risk. If you would invest 71.00 in SunLink Health Systems on September 3, 2024 and sell it today you would earn a total of 15.00 from holding SunLink Health Systems or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. Bt Brands
Performance |
| Timeline |
| SunLink Health Systems |
| Bt Brands |
SunLink Health and Bt Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Bt Brands
The main advantage of trading using opposite SunLink Health and Bt Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Bt Brands 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 Bt Brands will offset losses from the drop in Bt Brands' long position.| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
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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 Stocks Directory module to find actively traded stocks across global markets.
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