Correlation Between Sonic Healthcare and AMP
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and AMP 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 AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and AMP, you can compare the effects of market volatilities on Sonic Healthcare and AMP 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 AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and AMP.
Diversification Opportunities for Sonic Healthcare and AMP
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonic and AMP is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP 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 AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and AMP go up and down completely randomly.
Pair Corralation between Sonic Healthcare and AMP
Assuming the 90 days trading horizon Sonic Healthcare is expected to generate 26.94 times less return on investment than AMP. But when comparing it to its historical volatility, Sonic Healthcare is 1.63 times less risky than AMP. It trades about 0.01 of its potential returns per unit of risk. AMP is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 83.00 in AMP on September 14, 2024 and sell it today you would earn a total of 74.00 from holding AMP or generate 89.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare vs. AMP
Performance |
| Timeline |
| Sonic Healthcare |
| AMP |
Sonic Healthcare and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and AMP
The main advantage of trading using opposite Sonic Healthcare and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.| Sonic Healthcare vs. Hawsons Iron | Sonic Healthcare vs. TPG Telecom | Sonic Healthcare vs. Mount Gibson Iron | Sonic Healthcare vs. Vulcan Steel |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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