Correlation Between Singular Health and Sonic Healthcare
Can any of the company-specific risk be diversified away by investing in both Singular Health 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 Singular Health and Sonic Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singular Health Group and Sonic Healthcare, you can compare the effects of market volatilities on Singular Health 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 Singular Health with a short position of Sonic Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singular Health and Sonic Healthcare.
Diversification Opportunities for Singular Health and Sonic Healthcare
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singular and Sonic is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Singular Health Group and Sonic Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Healthcare and Singular Health 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 Singular Health Group 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 Singular Health i.e., Singular Health and Sonic Healthcare go up and down completely randomly.
Pair Corralation between Singular Health and Sonic Healthcare
Assuming the 90 days trading horizon Singular Health Group is expected to generate 3.6 times more return on investment than Sonic Healthcare. However, Singular Health is 3.6 times more volatile than Sonic Healthcare. It trades about 0.17 of its potential returns per unit of risk. Sonic Healthcare is currently generating about 0.16 per unit of risk. If you would invest 9.00 in Singular Health Group on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Singular Health Group or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singular Health Group vs. Sonic Healthcare
Performance |
| Timeline |
| Singular Health Group |
| Sonic Healthcare |
Singular Health and Sonic Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singular Health and Sonic Healthcare
The main advantage of trading using opposite Singular Health and Sonic Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singular Health 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.| Singular Health vs. Kkr Credit Income | Singular Health vs. Aussie Broadband | Singular Health vs. Lendlease Group | Singular Health vs. Prime Financial Group |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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