Correlation Between SunLink Health and Weyco
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Weyco 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 Weyco 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 Weyco Group, you can compare the effects of market volatilities on SunLink Health and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Weyco.
Diversification Opportunities for SunLink Health and Weyco
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SunLink and Weyco is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of SunLink Health i.e., SunLink Health and Weyco go up and down completely randomly.
Pair Corralation between SunLink Health and Weyco
Considering the 90-day investment horizon SunLink Health Systems is expected to under-perform the Weyco. In addition to that, SunLink Health is 1.16 times more volatile than Weyco Group. It trades about -0.03 of its total potential returns per unit of risk. Weyco Group is currently generating about 0.06 per unit of volatility. If you would invest 3,397 in Weyco Group on August 26, 2024 and sell it today you would earn a total of 248.00 from holding Weyco Group or generate 7.3% 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. Weyco Group
Performance |
| Timeline |
| SunLink Health Systems |
| Weyco Group |
SunLink Health and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Weyco
The main advantage of trading using opposite SunLink Health and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco's long position.The idea behind SunLink Health Systems and Weyco Group 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.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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