Correlation Between SunLink Health and Ecovyst
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Ecovyst 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 Ecovyst 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 Ecovyst, you can compare the effects of market volatilities on SunLink Health and Ecovyst 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 Ecovyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Ecovyst.
Diversification Opportunities for SunLink Health and Ecovyst
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunLink and Ecovyst is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of SunLink Health i.e., SunLink Health and Ecovyst go up and down completely randomly.
Pair Corralation between SunLink Health and Ecovyst
Considering the 90-day investment horizon SunLink Health Systems is expected to under-perform the Ecovyst. In addition to that, SunLink Health is 1.34 times more volatile than Ecovyst. It trades about -0.03 of its total potential returns per unit of risk. Ecovyst is currently generating about 0.18 per unit of volatility. If you would invest 656.00 in Ecovyst on August 26, 2024 and sell it today you would earn a total of 163.00 from holding Ecovyst or generate 24.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. Ecovyst
Performance |
| Timeline |
| SunLink Health Systems |
| Ecovyst |
SunLink Health and Ecovyst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Ecovyst
The main advantage of trading using opposite SunLink Health and Ecovyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Ecovyst 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 Ecovyst will offset losses from the drop in Ecovyst's long position.The idea behind SunLink Health Systems and Ecovyst pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ecovyst vs. Orion Engineered Carbons | Ecovyst vs. Cabot | Ecovyst vs. Minerals Technologies | Ecovyst vs. Quaker Chemical |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |