Correlation Between Maggie Beer and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both Maggie Beer 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 Maggie Beer and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maggie Beer Holdings and Sonic Healthcare, you can compare the effects of market volatilities on Maggie Beer 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 Maggie Beer with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maggie Beer and Sonic Healthcare.
Diversification Opportunities for Maggie Beer and Sonic Healthcare
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maggie and Sonic is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Sonic Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and Maggie Beer 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 Maggie Beer Holdings 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 Maggie Beer i.e., Maggie Beer and Sonic Healthcare go up and down completely randomly.
Pair Corralation between Maggie Beer and Sonic Healthcare
Assuming the 90 days trading horizon Maggie Beer Holdings is expected to generate 2.4 times more return on investment than Sonic Healthcare. However, Maggie Beer is 2.4 times more volatile than Sonic Healthcare. It trades about 0.25 of its potential returns per unit of risk. Sonic Healthcare is currently generating about 0.05 per unit of risk. If you would invest 5.30 in Maggie Beer Holdings on October 15, 2024 and sell it today you would earn a total of 0.50 from holding Maggie Beer Holdings or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maggie Beer Holdings vs. Sonic Healthcare
Performance |
| Timeline |
| Maggie Beer Holdings |
| Sonic Healthcare |
Maggie Beer and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maggie Beer and Sonic Healthcare
The main advantage of trading using opposite Maggie Beer and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maggie Beer 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.| Maggie Beer vs. Sports Entertainment Group | Maggie Beer vs. ACDC Metals | Maggie Beer vs. 4Dmedical | Maggie Beer vs. K2 Asset Management |
| Sonic Healthcare vs. DY6 Metals | Sonic Healthcare vs. Aurelia Metals | Sonic Healthcare vs. Austco Healthcare | Sonic Healthcare vs. Dicker Data |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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