Correlation Between SunLink Health and Supercom
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Supercom 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 Supercom 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 Supercom, you can compare the effects of market volatilities on SunLink Health and Supercom 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 Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Supercom.
Diversification Opportunities for SunLink Health and Supercom
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SunLink and Supercom is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of SunLink Health i.e., SunLink Health and Supercom go up and down completely randomly.
Pair Corralation between SunLink Health and Supercom
Considering the 90-day investment horizon SunLink Health Systems is expected to under-perform the Supercom. But the stock apears to be less risky and, when comparing its historical volatility, SunLink Health Systems is 1.81 times less risky than Supercom. The stock trades about 0.0 of its potential returns per unit of risk. The Supercom is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 760.00 in Supercom on August 27, 2024 and sell it today you would lose (392.00) from holding Supercom or give up 51.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. Supercom
Performance |
| Timeline |
| SunLink Health Systems |
| Supercom |
SunLink Health and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Supercom
The main advantage of trading using opposite SunLink Health and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.The idea behind SunLink Health Systems and Supercom 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.| Supercom vs. Plexus Corp | Supercom vs. Benchmark Electronics | Supercom vs. Jabil Circuit | Supercom vs. Sanmina |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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