Correlation Between Epsilon Healthcare and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both Epsilon Healthcare 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 Epsilon Healthcare and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epsilon Healthcare and Sonic Healthcare, you can compare the effects of market volatilities on Epsilon Healthcare 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 Epsilon Healthcare with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epsilon Healthcare and Sonic Healthcare.
Diversification Opportunities for Epsilon Healthcare and Sonic Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Epsilon and Sonic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Epsilon Healthcare and Sonic Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and Epsilon Healthcare 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 Epsilon Healthcare 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 Epsilon Healthcare i.e., Epsilon Healthcare and Sonic Healthcare go up and down completely randomly.
Pair Corralation between Epsilon Healthcare and Sonic Healthcare
If you would invest 2,724 in Sonic Healthcare on September 2, 2024 and sell it today you would earn a total of 133.00 from holding Sonic Healthcare or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Epsilon Healthcare vs. Sonic Healthcare
Performance |
| Timeline |
| Epsilon Healthcare |
| Sonic Healthcare |
Epsilon Healthcare and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epsilon Healthcare and Sonic Healthcare
The main advantage of trading using opposite Epsilon Healthcare and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epsilon Healthcare 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.| Epsilon Healthcare vs. Aneka Tambang Tbk | Epsilon Healthcare vs. Woolworths | Epsilon Healthcare vs. Commonwealth Bank | Epsilon Healthcare vs. BHP Group Limited |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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