Correlation Between SunLink Health and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Fidus Investment 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 Fidus Investment 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 Fidus Investment Corp, you can compare the effects of market volatilities on SunLink Health and Fidus Investment 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Fidus Investment.
Diversification Opportunities for SunLink Health and Fidus Investment
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SunLink and Fidus is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of SunLink Health i.e., SunLink Health and Fidus Investment go up and down completely randomly.
Pair Corralation between SunLink Health and Fidus Investment
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 6.34 times more return on investment than Fidus Investment. However, SunLink Health is 6.34 times more volatile than Fidus Investment Corp. It trades about 0.02 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.12 per unit of risk. If you would invest 77.00 in SunLink Health Systems on August 29, 2024 and sell it today you would lose (2.00) from holding SunLink Health Systems or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. Fidus Investment Corp
Performance |
| Timeline |
| SunLink Health Systems |
| Fidus Investment Corp |
SunLink Health and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Fidus Investment
The main advantage of trading using opposite SunLink Health and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment'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 |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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