Correlation Between Sonic Healthcare and Air Transport
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Air Transport 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 Air Transport 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 Air Transport Services, you can compare the effects of market volatilities on Sonic Healthcare and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Air Transport.
Diversification Opportunities for Sonic Healthcare and Air Transport
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonic and Air is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare Limited and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Air Transport go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Air Transport
Assuming the 90 days horizon Sonic Healthcare Limited is expected to generate 3.45 times more return on investment than Air Transport. However, Sonic Healthcare is 3.45 times more volatile than Air Transport Services. It trades about 0.1 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.15 per unit of risk. If you would invest 1,626 in Sonic Healthcare Limited on September 13, 2024 and sell it today you would earn a total of 64.00 from holding Sonic Healthcare Limited or generate 3.94% 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. Air Transport Services
Performance |
| Timeline |
| Sonic Healthcare |
| Air Transport Services |
Sonic Healthcare and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Air Transport
The main advantage of trading using opposite Sonic Healthcare and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| Sonic Healthcare vs. Internet Thailand PCL | Sonic Healthcare vs. Webster Financial | Sonic Healthcare vs. The Hanover Insurance | Sonic Healthcare vs. National Bank Holdings |
| Air Transport vs. Aena SME SA | Air Transport vs. Superior Plus Corp | Air Transport vs. SIVERS SEMICONDUCTORS AB | Air Transport vs. Norsk Hydro ASA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |