Correlation Between SunLink Health and Cebu Air
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Cebu Air 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 Cebu Air 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 Cebu Air ADR, you can compare the effects of market volatilities on SunLink Health and Cebu Air 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 Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Cebu Air.
Diversification Opportunities for SunLink Health and Cebu Air
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SunLink and Cebu is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Cebu Air ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air ADR 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 Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air ADR has no effect on the direction of SunLink Health i.e., SunLink Health and Cebu Air go up and down completely randomly.
Pair Corralation between SunLink Health and Cebu Air
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 1.37 times more return on investment than Cebu Air. However, SunLink Health is 1.37 times more volatile than Cebu Air ADR. It trades about 0.08 of its potential returns per unit of risk. Cebu Air ADR is currently generating about 0.06 per unit of risk. If you would invest 60.00 in SunLink Health Systems on August 31, 2024 and sell it today you would earn a total of 26.00 from holding SunLink Health Systems or generate 43.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
SunLink Health Systems vs. Cebu Air ADR
Performance |
| Timeline |
| SunLink Health Systems |
| Cebu Air ADR |
SunLink Health and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Cebu Air
The main advantage of trading using opposite SunLink Health and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
| Cebu Air vs. Olympic Steel | Cebu Air vs. Insteel Industries | Cebu Air vs. CECO Environmental Corp | Cebu Air vs. Western Union Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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