Correlation Between Modular Medical and SunLink Health

Can any of the company-specific risk be diversified away by investing in both Modular Medical and SunLink Health 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 Modular Medical and SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Modular Medical and SunLink Health Systems, you can compare the effects of market volatilities on Modular Medical and SunLink Health 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 Modular Medical with a short position of SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modular Medical and SunLink Health.

Diversification Opportunities for Modular Medical and SunLink Health

-0.4

Correlation Coefficient

Modular Medical  SunLink Health

Very good diversification

The 3 months correlation between Modular and SunLink is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Modular Medical and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems and Modular Medical 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 Modular Medical are associated (or correlated) with SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Modular Medical i.e., Modular Medical and SunLink Health go up and down completely randomly.

Pair Corralation between Modular Medical and SunLink Health

Given the investment horizon of 90 days Modular Medical is expected to under-perform the SunLink Health. In addition to that, Modular Medical is 1.09 times more volatile than SunLink Health Systems. It trades about -0.06 of its total potential returns per unit of risk. SunLink Health Systems is currently generating about 0.11 per unit of volatility. If you would invest  90.00  in SunLink Health Systems on April 22, 2025 and sell it today you would earn a total of  26.00  from holding SunLink Health Systems or generate 28.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Modular Medical  vs.  SunLink Health Systems

Modular Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Modular Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SunLink Health Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SunLink Health showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Modular Medical and SunLink Health

The main advantage of trading using opposite Modular Medical and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modular Medical position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health's long position.

The idea behind Modular Medical and SunLink Health Systems 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.