Correlation Between SunLink Health and Element Global
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Element Global 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 Element Global 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 Element Global, you can compare the effects of market volatilities on SunLink Health and Element Global 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 Element Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Element Global.
Diversification Opportunities for SunLink Health and Element Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SunLink and Element is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Element Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Global 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 Element Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Global has no effect on the direction of SunLink Health i.e., SunLink Health and Element Global go up and down completely randomly.
Pair Corralation between SunLink Health and Element Global
If you would invest 61.00 in SunLink Health Systems on August 26, 2024 and sell it today you would earn a total of 16.00 from holding SunLink Health Systems or generate 26.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. Element Global
Performance |
| Timeline |
| SunLink Health Systems |
| Element Global |
SunLink Health and Element Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Element Global
The main advantage of trading using opposite SunLink Health and Element Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Element Global 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 Element Global will offset losses from the drop in Element Global's long position.The idea behind SunLink Health Systems and Element Global 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.| Element Global vs. Pool Corporation | Element Global vs. Asbury Automotive Group | Element Global vs. Grocery Outlet Holding | Element Global vs. SunLink Health Systems |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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