Correlation Between NYSE Composite and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sonic Healthcare Limited, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sonic Healthcare.
Diversification Opportunities for NYSE Composite and Sonic Healthcare
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Sonic is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Sonic Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Sonic Healthcare go up and down completely randomly.
Pair Corralation between NYSE Composite and Sonic Healthcare
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.22 times more return on investment than Sonic Healthcare. However, NYSE Composite is 4.6 times less risky than Sonic Healthcare. It trades about 0.08 of its potential returns per unit of risk. Sonic Healthcare Limited is currently generating about 0.01 per unit of risk. If you would invest 1,549,498 in NYSE Composite on September 4, 2024 and sell it today you would earn a total of 471,824 from holding NYSE Composite or generate 30.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.97% |
| Values | Daily Returns |
NYSE Composite vs. Sonic Healthcare Limited
Performance |
| Timeline |
NYSE Composite and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sonic Healthcare Limited
Pair trading matchups for Sonic Healthcare
Pair Trading with NYSE Composite and Sonic Healthcare
The main advantage of trading using opposite NYSE Composite and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
| Sonic Healthcare vs. Lonza Group AG | Sonic Healthcare vs. Personalis | Sonic Healthcare vs. Applied DNA Sciences | Sonic Healthcare vs. ProPhase Labs |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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