Correlation Between SunLink Health and Talen Energy
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Talen Energy 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 Talen Energy 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 Talen Energy, you can compare the effects of market volatilities on SunLink Health and Talen Energy 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 Talen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Talen Energy.
Diversification Opportunities for SunLink Health and Talen Energy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunLink and Talen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Talen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talen Energy 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 Talen Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talen Energy has no effect on the direction of SunLink Health i.e., SunLink Health and Talen Energy go up and down completely randomly.
Pair Corralation between SunLink Health and Talen Energy
Considering the 90-day investment horizon SunLink Health is expected to generate 12.68 times less return on investment than Talen Energy. In addition to that, SunLink Health is 1.8 times more volatile than Talen Energy. It trades about 0.01 of its total potential returns per unit of risk. Talen Energy is currently generating about 0.17 per unit of volatility. If you would invest 5,188 in Talen Energy on September 12, 2024 and sell it today you would earn a total of 15,178 from holding Talen Energy or generate 292.56% 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. Talen Energy
Performance |
| Timeline |
| SunLink Health Systems |
| Talen Energy |
SunLink Health and Talen Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Talen Energy
The main advantage of trading using opposite SunLink Health and Talen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Talen Energy 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 Talen Energy will offset losses from the drop in Talen Energy'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 |
| Talen Energy vs. Grupo Aeroportuario del | Talen Energy vs. Alaska Air Group | Talen Energy vs. AerSale Corp | Talen Energy vs. SunLink Health Systems |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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