Correlation Between SunLink Health and SemiLEDS

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

Diversification Opportunities for SunLink Health and SemiLEDS

-0.6

Correlation Coefficient

SunLink Health  SemiLEDS

Excellent diversification

The 3 months correlation between SunLink and SemiLEDS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS 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 SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of SunLink Health i.e., SunLink Health and SemiLEDS go up and down completely randomly.

Pair Corralation between SunLink Health and SemiLEDS

Considering the 90-day investment horizon SunLink Health Systems is expected to generate 0.9 times more return on investment than SemiLEDS. However, SunLink Health Systems is 1.11 times less risky than SemiLEDS. It trades about 0.11 of its potential returns per unit of risk. SemiLEDS is currently generating about -0.07 per unit of risk. If you would invest  82.00  in SunLink Health Systems on May 6, 2025 and sell it today you would earn a total of  22.00  from holding SunLink Health Systems or generate 26.83% return on investment over 90 days.

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

SunLink Health Systems  vs.  SemiLEDS

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.

SemiLEDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SemiLEDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with SunLink Health and SemiLEDS

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

The idea behind SunLink Health Systems and SemiLEDS 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.