Correlation Between SPASX 200 and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both SPASX 200 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 SPASX 200 and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX 200 Materials and Sonic Healthcare, you can compare the effects of market volatilities on SPASX 200 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 SPASX 200 with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX 200 and Sonic Healthcare.
Diversification Opportunities for SPASX 200 and Sonic Healthcare
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPASX and Sonic is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SPASX 200 Materials and Sonic Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and SPASX 200 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 SPASX 200 Materials 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 SPASX 200 i.e., SPASX 200 and Sonic Healthcare go up and down completely randomly.
Pair Corralation between SPASX 200 and Sonic Healthcare
Assuming the 90 days trading horizon SPASX 200 Materials is expected to under-perform the Sonic Healthcare. But the index apears to be less risky and, when comparing its historical volatility, SPASX 200 Materials is 1.81 times less risky than Sonic Healthcare. The index trades about -0.13 of its potential returns per unit of risk. The Sonic Healthcare is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,664 in Sonic Healthcare on September 2, 2024 and sell it today you would earn a total of 193.00 from holding Sonic Healthcare or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPASX 200 Materials vs. Sonic Healthcare
Performance |
| Timeline |
SPASX 200 and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
SPASX 200 Materials
Pair trading matchups for SPASX 200
Sonic Healthcare
Pair trading matchups for Sonic Healthcare
Pair Trading with SPASX 200 and Sonic Healthcare
The main advantage of trading using opposite SPASX 200 and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX 200 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.| SPASX 200 vs. Sandon Capital Investments | SPASX 200 vs. Diversified United Investment | SPASX 200 vs. Auctus Alternative Investments | SPASX 200 vs. DY6 Metals |
| Sonic Healthcare vs. Westpac Banking | Sonic Healthcare vs. iShares Global Healthcare | Sonic Healthcare vs. Australian Dairy Farms | Sonic Healthcare vs. Adriatic Metals Plc |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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