Correlation Between SunLink Health and SkyWest
Can any of the company-specific risk be diversified away by investing in both SunLink Health and SkyWest 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 SkyWest 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 SkyWest, you can compare the effects of market volatilities on SunLink Health and SkyWest 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 SkyWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and SkyWest.
Diversification Opportunities for SunLink Health and SkyWest
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SunLink and SkyWest is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and SkyWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkyWest 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 SkyWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SkyWest has no effect on the direction of SunLink Health i.e., SunLink Health and SkyWest go up and down completely randomly.
Pair Corralation between SunLink Health and SkyWest
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 2.26 times more return on investment than SkyWest. However, SunLink Health is 2.26 times more volatile than SkyWest. It trades about 0.07 of its potential returns per unit of risk. SkyWest is currently generating about 0.13 per unit of risk. If you would invest 63.00 in SunLink Health Systems on September 3, 2024 and sell it today you would earn a total of 23.00 from holding SunLink Health Systems or generate 36.51% 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. SkyWest
Performance |
| Timeline |
| SunLink Health Systems |
| SkyWest |
SunLink Health and SkyWest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and SkyWest
The main advantage of trading using opposite SunLink Health and SkyWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, SkyWest 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 SkyWest will offset losses from the drop in SkyWest'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 |
| SkyWest vs. Copa Holdings SA | SkyWest vs. Sun Country Airlines | SkyWest vs. Air Transport Services | SkyWest vs. Frontier Group Holdings |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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