Correlation Between Fonar and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Fonar and Sotera Health 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 Fonar and Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fonar and Sotera Health Co, you can compare the effects of market volatilities on Fonar and Sotera Health 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 Fonar with a short position of Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fonar and Sotera Health.
Diversification Opportunities for Fonar and Sotera Health
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fonar and Sotera is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fonar and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and Fonar 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 Fonar are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Fonar i.e., Fonar and Sotera Health go up and down completely randomly.
Pair Corralation between Fonar and Sotera Health
Given the investment horizon of 90 days Fonar is expected to under-perform the Sotera Health. But the stock apears to be less risky and, when comparing its historical volatility, Fonar is 1.1 times less risky than Sotera Health. The stock trades about -0.03 of its potential returns per unit of risk. The Sotera Health Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,523 in Sotera Health Co on November 3, 2024 and sell it today you would lose (152.00) from holding Sotera Health Co or give up 9.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fonar vs. Sotera Health Co
Performance |
| Timeline |
| Fonar |
| Sotera Health |
Fonar and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fonar and Sotera Health
The main advantage of trading using opposite Fonar and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fonar position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| Fonar vs. Burning Rock Biotech | Fonar vs. Sera Prognostics | Fonar vs. Exagen Inc | Fonar vs. Castle Biosciences |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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