Correlation Between Sonic Healthcare and JD HEALTH
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and JD 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 Sonic Healthcare and JD HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare Limited and JD HEALTH INTL, you can compare the effects of market volatilities on Sonic Healthcare and JD 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 Sonic Healthcare with a short position of JD HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and JD HEALTH.
Diversification Opportunities for Sonic Healthcare and JD HEALTH
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonic and 8ZN is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare Limited and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL and Sonic 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 Sonic Healthcare Limited are associated (or correlated) with JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and JD HEALTH go up and down completely randomly.
Pair Corralation between Sonic Healthcare and JD HEALTH
Assuming the 90 days horizon Sonic Healthcare Limited is expected to generate 0.4 times more return on investment than JD HEALTH. However, Sonic Healthcare Limited is 2.5 times less risky than JD HEALTH. It trades about 0.12 of its potential returns per unit of risk. JD HEALTH INTL is currently generating about 0.05 per unit of risk. If you would invest 1,412 in Sonic Healthcare Limited on September 3, 2024 and sell it today you would earn a total of 348.00 from holding Sonic Healthcare Limited or generate 24.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare Limited vs. JD HEALTH INTL
Performance |
| Timeline |
| Sonic Healthcare |
| JD HEALTH INTL |
Sonic Healthcare and JD HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and JD HEALTH
The main advantage of trading using opposite Sonic Healthcare and JD HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, JD 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 JD HEALTH will offset losses from the drop in JD HEALTH's long position.| Sonic Healthcare vs. JD HEALTH INTL | Sonic Healthcare vs. Fresenius SE Co | Sonic Healthcare vs. Option Care Health |
| JD HEALTH vs. ZURICH INSURANCE GROUP | JD HEALTH vs. Ramsay Health Care | JD HEALTH vs. QBE Insurance Group | JD HEALTH vs. Zurich Insurance Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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