Correlation Between SunLink Health and PetMed Express
Can any of the company-specific risk be diversified away by investing in both SunLink Health and PetMed Express 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 PetMed Express 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 PetMed Express, you can compare the effects of market volatilities on SunLink Health and PetMed Express 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 PetMed Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and PetMed Express.
Diversification Opportunities for SunLink Health and PetMed Express
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SunLink and PetMed is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and PetMed Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetMed Express 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 PetMed Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetMed Express has no effect on the direction of SunLink Health i.e., SunLink Health and PetMed Express go up and down completely randomly.
Pair Corralation between SunLink Health and PetMed Express
Considering the 90-day investment horizon SunLink Health Systems is expected to under-perform the PetMed Express. But the stock apears to be less risky and, when comparing its historical volatility, SunLink Health Systems is 2.08 times less risky than PetMed Express. The stock trades about -0.18 of its potential returns per unit of risk. The PetMed Express is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 415.00 in PetMed Express on August 27, 2024 and sell it today you would earn a total of 61.00 from holding PetMed Express or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. PetMed Express
Performance |
| Timeline |
| SunLink Health Systems |
| PetMed Express |
SunLink Health and PetMed Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and PetMed Express
The main advantage of trading using opposite SunLink Health and PetMed Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, PetMed Express 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 PetMed Express will offset losses from the drop in PetMed Express' long position.| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
| PetMed Express vs. High Tide | PetMed Express vs. China Jo Jo Drugstores | PetMed Express vs. Walgreens Boots Alliance | PetMed Express vs. 111 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 CEOs Directory module to screen CEOs from public companies around the world.
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