Correlation Between Stora Enso and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both Stora Enso 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 Stora Enso and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stora Enso Oyj and Sonic Healthcare Ltd, you can compare the effects of market volatilities on Stora Enso 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 Stora Enso with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Sonic Healthcare.
Diversification Opportunities for Stora Enso and Sonic Healthcare
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stora and Sonic is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Sonic Healthcare Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and Stora Enso 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 Stora Enso Oyj 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 Stora Enso i.e., Stora Enso and Sonic Healthcare go up and down completely randomly.
Pair Corralation between Stora Enso and Sonic Healthcare
If you would invest 1,847 in Sonic Healthcare Ltd on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Sonic Healthcare Ltd or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Stora Enso Oyj vs. Sonic Healthcare Ltd
Performance |
| Timeline |
| Stora Enso Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sonic Healthcare |
Stora Enso and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Sonic Healthcare
The main advantage of trading using opposite Stora Enso and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso 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.| Stora Enso vs. Nine Dragons Paper | Stora Enso vs. Canfor Pulp Products | Stora Enso vs. Mondi PLC ADR | Stora Enso vs. Clearwater Paper |
| Sonic Healthcare vs. China New Energy | Sonic Healthcare vs. Lonza Group | Sonic Healthcare vs. Charles River Laboratories | Sonic Healthcare vs. Qiagen NV |
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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