Correlation Between SunLink Health and Walgreens Boots
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Walgreens Boots 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 Walgreens Boots 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 Walgreens Boots Alliance, you can compare the effects of market volatilities on SunLink Health and Walgreens Boots 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 Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Walgreens Boots.
Diversification Opportunities for SunLink Health and Walgreens Boots
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SunLink and Walgreens is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Walgreens Boots Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walgreens Boots Alliance 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 Walgreens Boots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walgreens Boots Alliance has no effect on the direction of SunLink Health i.e., SunLink Health and Walgreens Boots go up and down completely randomly.
Pair Corralation between SunLink Health and Walgreens Boots
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 1.64 times more return on investment than Walgreens Boots. However, SunLink Health is 1.64 times more volatile than Walgreens Boots Alliance. It trades about -0.09 of its potential returns per unit of risk. Walgreens Boots Alliance is currently generating about -0.2 per unit of risk. If you would invest 88.00 in SunLink Health Systems on August 23, 2024 and sell it today you would lose (9.00) from holding SunLink Health Systems or give up 10.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. Walgreens Boots Alliance
Performance |
| Timeline |
| SunLink Health Systems |
| Walgreens Boots Alliance |
SunLink Health and Walgreens Boots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Walgreens Boots
The main advantage of trading using opposite SunLink Health and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Walgreens Boots 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 Walgreens Boots will offset losses from the drop in Walgreens Boots' long position.| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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