Correlation Between Sonic Healthcare and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Auswide Bank 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 Auswide Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and Auswide Bank, you can compare the effects of market volatilities on Sonic Healthcare and Auswide Bank 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 Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Auswide Bank.
Diversification Opportunities for Sonic Healthcare and Auswide Bank
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sonic and Auswide is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank 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 are associated (or correlated) with Auswide Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auswide Bank has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Auswide Bank go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Auswide Bank
Assuming the 90 days trading horizon Sonic Healthcare is expected to generate 3.12 times less return on investment than Auswide Bank. But when comparing it to its historical volatility, Sonic Healthcare is 2.43 times less risky than Auswide Bank. It trades about 0.18 of its potential returns per unit of risk. Auswide Bank is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 467.00 in Auswide Bank on November 7, 2024 and sell it today you would earn a total of 38.00 from holding Auswide Bank or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare vs. Auswide Bank
Performance |
| Timeline |
| Sonic Healthcare |
| Auswide Bank |
Sonic Healthcare and Auswide Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Auswide Bank
The main advantage of trading using opposite Sonic Healthcare and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Auswide Bank 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 Auswide Bank will offset losses from the drop in Auswide Bank's long position.| Sonic Healthcare vs. Cleanaway Waste Management | Sonic Healthcare vs. Sports Entertainment Group | Sonic Healthcare vs. BKI Investment | Sonic Healthcare vs. Regal Funds Management |
| Auswide Bank vs. Arc Funds | Auswide Bank vs. Home Consortium | Auswide Bank vs. BlackWall Property Funds | Auswide Bank vs. Beam Communications Holdings |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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