Correlation Between SunLink Health and Highest Performances
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Highest Performances 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 Highest Performances 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 Highest Performances Holdings, you can compare the effects of market volatilities on SunLink Health and Highest Performances 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 Highest Performances. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Highest Performances.
Diversification Opportunities for SunLink Health and Highest Performances
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunLink and Highest is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Highest Performances Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highest Performances 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 Highest Performances. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highest Performances has no effect on the direction of SunLink Health i.e., SunLink Health and Highest Performances go up and down completely randomly.
Pair Corralation between SunLink Health and Highest Performances
Considering the 90-day investment horizon SunLink Health Systems is expected to under-perform the Highest Performances. In addition to that, SunLink Health is 1.42 times more volatile than Highest Performances Holdings. It trades about -0.02 of its total potential returns per unit of risk. Highest Performances Holdings is currently generating about -0.02 per unit of volatility. If you would invest 32.00 in Highest Performances Holdings on September 12, 2024 and sell it today you would lose (1.00) from holding Highest Performances Holdings or give up 3.12% 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. Highest Performances Holdings
Performance |
| Timeline |
| SunLink Health Systems |
| Highest Performances |
SunLink Health and Highest Performances Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Highest Performances
The main advantage of trading using opposite SunLink Health and Highest Performances positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Highest Performances 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 Highest Performances will offset losses from the drop in Highest Performances' long position.| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
| Highest Performances vs. Iridium Communications | Highest Performances vs. Radcom | Highest Performances vs. Stepan Company | Highest Performances vs. Academy Sports Outdoors |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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