Correlation Between Centuria Industrial and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial 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 Centuria Industrial and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centuria Industrial Reit and Sonic Healthcare, you can compare the effects of market volatilities on Centuria Industrial 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 Centuria Industrial with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Sonic Healthcare.
Diversification Opportunities for Centuria Industrial and Sonic Healthcare
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centuria and Sonic is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Sonic Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and Centuria Industrial 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 Centuria Industrial Reit 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 Centuria Industrial i.e., Centuria Industrial and Sonic Healthcare go up and down completely randomly.
Pair Corralation between Centuria Industrial and Sonic Healthcare
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to under-perform the Sonic Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Centuria Industrial Reit is 3.09 times less risky than Sonic Healthcare. The stock trades about -0.28 of its potential returns per unit of risk. The Sonic Healthcare is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,693 in Sonic Healthcare on September 1, 2024 and sell it today you would earn a total of 164.00 from holding Sonic Healthcare or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Sonic Healthcare
Performance |
| Timeline |
| Centuria Industrial Reit |
| Sonic Healthcare |
Centuria Industrial and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Sonic Healthcare
The main advantage of trading using opposite Centuria Industrial and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial 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.| Centuria Industrial vs. Sandon Capital Investments | Centuria Industrial vs. Argo Investments | Centuria Industrial vs. Truscott Mining Corp | Centuria Industrial vs. Aurelia Metals |
| Sonic Healthcare vs. Aneka Tambang Tbk | Sonic Healthcare vs. ANZ Group Holdings | Sonic Healthcare vs. Australia and New | Sonic Healthcare vs. ANZ Group Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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