Correlation Between SunLink Health and BARCLAYS

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Can any of the company-specific risk be diversified away by investing in both SunLink Health and BARCLAYS 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 BARCLAYS 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 BARCLAYS PLC, you can compare the effects of market volatilities on SunLink Health and BARCLAYS 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 BARCLAYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and BARCLAYS.

Diversification Opportunities for SunLink Health and BARCLAYS

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between SunLink and BARCLAYS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and BARCLAYS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BARCLAYS PLC 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 BARCLAYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BARCLAYS PLC has no effect on the direction of SunLink Health i.e., SunLink Health and BARCLAYS go up and down completely randomly.

Pair Corralation between SunLink Health and BARCLAYS

Considering the 90-day investment horizon SunLink Health Systems is expected to generate 5.74 times more return on investment than BARCLAYS. However, SunLink Health is 5.74 times more volatile than BARCLAYS PLC. It trades about 0.01 of its potential returns per unit of risk. BARCLAYS PLC is currently generating about 0.03 per unit of risk. If you would invest  98.00  in SunLink Health Systems on September 2, 2024 and sell it today you would lose (12.00) from holding SunLink Health Systems or give up 12.24% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy76.21%
ValuesDaily Returns

SunLink Health Systems  vs.  BARCLAYS PLC

 Performance 
       Timeline  
SunLink Health Systems 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, SunLink Health showed solid returns over the last few months and may actually be approaching a breakup point.
BARCLAYS PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BARCLAYS PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BARCLAYS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SunLink Health and BARCLAYS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SunLink Health and BARCLAYS

The main advantage of trading using opposite SunLink Health and BARCLAYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, BARCLAYS 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 BARCLAYS will offset losses from the drop in BARCLAYS's long position.
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The idea behind SunLink Health Systems and BARCLAYS PLC 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.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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