Correlation Between BANK RAKYAT and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT 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 BANK RAKYAT and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK RAKYAT IND and Sonic Healthcare Limited, you can compare the effects of market volatilities on BANK RAKYAT 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 BANK RAKYAT with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Sonic Healthcare.
Diversification Opportunities for BANK RAKYAT and Sonic Healthcare
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BANK and Sonic is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Sonic Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and BANK RAKYAT 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 BANK RAKYAT IND 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 BANK RAKYAT i.e., BANK RAKYAT and Sonic Healthcare go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Sonic Healthcare
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Sonic Healthcare. In addition to that, BANK RAKYAT is 1.65 times more volatile than Sonic Healthcare Limited. It trades about -0.01 of its total potential returns per unit of risk. Sonic Healthcare Limited is currently generating about -0.01 per unit of volatility. If you would invest 2,017 in Sonic Healthcare Limited on November 28, 2024 and sell it today you would lose (312.00) from holding Sonic Healthcare Limited or give up 15.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Sonic Healthcare Limited
Performance |
| Timeline |
| BANK RAKYAT IND |
| Sonic Healthcare |
BANK RAKYAT and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Sonic Healthcare
The main advantage of trading using opposite BANK RAKYAT and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT 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.| BANK RAKYAT vs. Northern Data AG | BANK RAKYAT vs. DATAGROUP SE | BANK RAKYAT vs. Information Services International Dentsu | BANK RAKYAT vs. Firan Technology Group |
| Sonic Healthcare vs. SHELF DRILLING LTD | Sonic Healthcare vs. NORWEGIAN AIR SHUT | Sonic Healthcare vs. RYANAIR HLDGS ADR | Sonic Healthcare vs. UET United Electronic |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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