Correlation Between SunLink Health and Old Republic
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Old Republic 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 Old Republic 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 Old Republic International, you can compare the effects of market volatilities on SunLink Health and Old Republic 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 Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Old Republic.
Diversification Opportunities for SunLink Health and Old Republic
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunLink and Old is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna 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 Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of SunLink Health i.e., SunLink Health and Old Republic go up and down completely randomly.
Pair Corralation between SunLink Health and Old Republic
Considering the 90-day investment horizon SunLink Health is expected to generate 8.77 times less return on investment than Old Republic. In addition to that, SunLink Health is 3.73 times more volatile than Old Republic International. It trades about 0.0 of its total potential returns per unit of risk. Old Republic International is currently generating about 0.12 per unit of volatility. If you would invest 2,367 in Old Republic International on August 26, 2024 and sell it today you would earn a total of 1,493 from holding Old Republic International or generate 63.08% 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. Old Republic International
Performance |
| Timeline |
| SunLink Health Systems |
| Old Republic Interna |
SunLink Health and Old Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Old Republic
The main advantage of trading using opposite SunLink Health and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic's long position.The idea behind SunLink Health Systems and Old Republic International 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.| Old Republic vs. Fiverr International | Old Republic vs. Pinterest | Old Republic vs. Upstart Holdings | Old Republic vs. Fastly Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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