Correlation Between SunLink Health and LifeMD
Can any of the company-specific risk be diversified away by investing in both SunLink Health and LifeMD 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 LifeMD 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 LifeMD Inc, you can compare the effects of market volatilities on SunLink Health and LifeMD 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 LifeMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and LifeMD.
Diversification Opportunities for SunLink Health and LifeMD
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SunLink and LifeMD is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and LifeMD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeMD Inc 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 LifeMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeMD Inc has no effect on the direction of SunLink Health i.e., SunLink Health and LifeMD go up and down completely randomly.
Pair Corralation between SunLink Health and LifeMD
Considering the 90-day investment horizon SunLink Health Systems is expected to under-perform the LifeMD. But the stock apears to be less risky and, when comparing its historical volatility, SunLink Health Systems is 1.99 times less risky than LifeMD. The stock trades about -0.18 of its potential returns per unit of risk. The LifeMD Inc is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 439.00 in LifeMD Inc on August 28, 2024 and sell it today you would earn a total of 208.00 from holding LifeMD Inc or generate 47.38% 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. LifeMD Inc
Performance |
| Timeline |
| SunLink Health Systems |
| LifeMD Inc |
SunLink Health and LifeMD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and LifeMD
The main advantage of trading using opposite SunLink Health and LifeMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, LifeMD 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 LifeMD will offset losses from the drop in LifeMD'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 |
| LifeMD vs. Streamline Health Solutions | LifeMD vs. HealthStream | LifeMD vs. National Research Corp | LifeMD vs. Privia Health Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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