Correlation Between SunLink Health and National Beverage
Can any of the company-specific risk be diversified away by investing in both SunLink Health and National Beverage 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 National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on SunLink Health and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and National Beverage.
Diversification Opportunities for SunLink Health and National Beverage
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunLink and National is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of SunLink Health i.e., SunLink Health and National Beverage go up and down completely randomly.
Pair Corralation between SunLink Health and National Beverage
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 2.45 times more return on investment than National Beverage. However, SunLink Health is 2.45 times more volatile than National Beverage Corp. It trades about 0.03 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.02 per unit of risk. If you would invest 67.00 in SunLink Health Systems on September 12, 2024 and sell it today you would earn a total of 8.00 from holding SunLink Health Systems or generate 11.94% 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. National Beverage Corp
Performance |
| Timeline |
| SunLink Health Systems |
| National Beverage Corp |
SunLink Health and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and National Beverage
The main advantage of trading using opposite SunLink Health and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage'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 |
| National Beverage vs. Celsius Holdings | National Beverage vs. Monster Beverage Corp | National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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