Correlation Between 88 Energy and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both 88 Energy and Sonic Healthcare 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 88 Energy and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 88 Energy and Sonic Healthcare, you can compare the effects of market volatilities on 88 Energy and Sonic Healthcare 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 88 Energy with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and Sonic Healthcare.
Diversification Opportunities for 88 Energy and Sonic Healthcare
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 88E and Sonic is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and Sonic Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and 88 Energy 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 88 Energy are associated (or correlated) with Sonic Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonic Healthcare has no effect on the direction of 88 Energy i.e., 88 Energy and Sonic Healthcare go up and down completely randomly.
Pair Corralation between 88 Energy and Sonic Healthcare
Assuming the 90 days trading horizon 88 Energy is expected to under-perform the Sonic Healthcare. In addition to that, 88 Energy is 12.33 times more volatile than Sonic Healthcare. It trades about -0.02 of its total potential returns per unit of risk. Sonic Healthcare is currently generating about 0.2 per unit of volatility. If you would invest 2,653 in Sonic Healthcare on September 3, 2024 and sell it today you would earn a total of 204.00 from holding Sonic Healthcare or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
88 Energy vs. Sonic Healthcare
Performance |
| Timeline |
| 88 Energy |
| Sonic Healthcare |
88 Energy and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 88 Energy and Sonic Healthcare
The main advantage of trading using opposite 88 Energy and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy position performs unexpectedly, Sonic Healthcare 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 Sonic Healthcare will offset losses from the drop in Sonic Healthcare's long position.| 88 Energy vs. Sonic Healthcare | 88 Energy vs. Talisman Mining | 88 Energy vs. Evolution Mining | 88 Energy vs. Fisher Paykel Healthcare |
| Sonic Healthcare vs. TTG Fintech | Sonic Healthcare vs. Land Homes Group | Sonic Healthcare vs. Regis Healthcare | Sonic Healthcare vs. Horseshoe Metals |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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