Correlation Between SunLink Health and Ihuman

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

Diversification Opportunities for SunLink Health and Ihuman

0.2

Correlation Coefficient

SunLink Health  Ihuman

Modest diversification

The 3 months correlation between SunLink and Ihuman is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of SunLink Health i.e., SunLink Health and Ihuman go up and down completely randomly.

Pair Corralation between SunLink Health and Ihuman

Considering the 90-day investment horizon SunLink Health is expected to generate 2.24 times less return on investment than Ihuman. But when comparing it to its historical volatility, SunLink Health Systems is 1.06 times less risky than Ihuman. It trades about 0.04 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  154.00  in Ihuman Inc on August 9, 2024 and sell it today you would earn a total of  26.00  from holding Ihuman Inc or generate 16.88% return on investment over 90 days.

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

SunLink Health Systems  vs.  Ihuman Inc

SunLink Health Systems

Risk-Adjusted Performance

3 of 100

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 conflicting basic indicators, SunLink Health may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Ihuman Inc

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SunLink Health and Ihuman

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

The idea behind SunLink Health Systems and Ihuman Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.