Correlation Between Black Rock and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both Black Rock 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 Black Rock and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Rock Mining and Sonic Healthcare, you can compare the effects of market volatilities on Black Rock 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 Black Rock with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Sonic Healthcare.
Diversification Opportunities for Black Rock and Sonic Healthcare
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and Sonic is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Sonic Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and Black Rock 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 Black Rock Mining 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 Black Rock i.e., Black Rock and Sonic Healthcare go up and down completely randomly.
Pair Corralation between Black Rock and Sonic Healthcare
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Sonic Healthcare. In addition to that, Black Rock is 2.11 times more volatile than Sonic Healthcare. It trades about -0.04 of its total potential returns per unit of risk. Sonic Healthcare is currently generating about 0.06 per unit of volatility. If you would invest 2,722 in Sonic Healthcare on August 29, 2024 and sell it today you would earn a total of 122.00 from holding Sonic Healthcare or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Rock Mining vs. Sonic Healthcare
Performance |
| Timeline |
| Black Rock Mining |
| Sonic Healthcare |
Black Rock and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and Sonic Healthcare
The main advantage of trading using opposite Black Rock and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock 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.| Black Rock vs. Northern Star Resources | Black Rock vs. Evolution Mining | Black Rock vs. Bluescope Steel | Black Rock vs. Sandfire Resources NL |
| Sonic Healthcare vs. Summit Resources Limited | Sonic Healthcare vs. Champion Iron | Sonic Healthcare vs. Ridley | Sonic Healthcare vs. Peel Mining |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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