Correlation Between SunLink Health and China Jo
Can any of the company-specific risk be diversified away by investing in both SunLink Health and China Jo 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 China Jo 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 China Jo Jo Drugstores, you can compare the effects of market volatilities on SunLink Health and China Jo 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 China Jo. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and China Jo.
Diversification Opportunities for SunLink Health and China Jo
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SunLink and China is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and China Jo Jo Drugstores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Jo Jo 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 China Jo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Jo Jo has no effect on the direction of SunLink Health i.e., SunLink Health and China Jo go up and down completely randomly.
Pair Corralation between SunLink Health and China Jo
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 0.42 times more return on investment than China Jo. However, SunLink Health Systems is 2.41 times less risky than China Jo. It trades about 0.02 of its potential returns per unit of risk. China Jo Jo Drugstores is currently generating about 0.0 per unit of risk. If you would invest 84.00 in SunLink Health Systems on August 23, 2024 and sell it today you would lose (5.00) from holding SunLink Health Systems or give up 5.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. China Jo Jo Drugstores
Performance |
| Timeline |
| SunLink Health Systems |
| China Jo Jo |
SunLink Health and China Jo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and China Jo
The main advantage of trading using opposite SunLink Health and China Jo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, China Jo 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 China Jo will offset losses from the drop in China Jo'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 |
| China Jo vs. SunLink Health Systems | China Jo vs. Leafly Holdings | China Jo vs. Allstar Health Brands | China Jo vs. Walgreens Boots Alliance |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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