Correlation Between Sonic Healthcare and Garofalo Health
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Garofalo 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 Garofalo 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 Garofalo Health Care, you can compare the effects of market volatilities on Sonic Healthcare and Garofalo 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 Garofalo Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Garofalo Health.
Diversification Opportunities for Sonic Healthcare and Garofalo Health
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sonic and Garofalo is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare Limited and Garofalo Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garofalo Health Care 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 Garofalo Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garofalo Health Care has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Garofalo Health go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Garofalo Health
If you would invest 0.00 in Sonic Healthcare Limited on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Sonic Healthcare Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Sonic Healthcare Limited vs. Garofalo Health Care
Performance |
| Timeline |
| Sonic Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Garofalo Health Care |
Sonic Healthcare and Garofalo Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Garofalo Health
The main advantage of trading using opposite Sonic Healthcare and Garofalo Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Garofalo 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 Garofalo Health will offset losses from the drop in Garofalo Health's long position.| Sonic Healthcare vs. Easy Software AG | Sonic Healthcare vs. Unity Software | Sonic Healthcare vs. UPDATE SOFTWARE | Sonic Healthcare vs. ASURE SOFTWARE |
| Garofalo Health vs. Constellation Software | Garofalo Health vs. De Grey Mining | Garofalo Health vs. MAGNUM MINING EXP | Garofalo Health vs. Kingdee International Software |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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