Correlation Between Sonic Healthcare and ASX
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and ASX 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 ASX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and ASX, you can compare the effects of market volatilities on Sonic Healthcare and ASX 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 ASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and ASX.
Diversification Opportunities for Sonic Healthcare and ASX
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sonic and ASX is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and ASX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASX 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 ASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASX has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and ASX go up and down completely randomly.
Pair Corralation between Sonic Healthcare and ASX
Assuming the 90 days trading horizon Sonic Healthcare is expected to generate 2.13 times less return on investment than ASX. In addition to that, Sonic Healthcare is 1.19 times more volatile than ASX. It trades about 0.01 of its total potential returns per unit of risk. ASX is currently generating about 0.02 per unit of volatility. If you would invest 6,331 in ASX on September 12, 2024 and sell it today you would earn a total of 555.00 from holding ASX or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare vs. ASX
Performance |
| Timeline |
| Sonic Healthcare |
| ASX |
Sonic Healthcare and ASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and ASX
The main advantage of trading using opposite Sonic Healthcare and ASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, ASX 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 ASX will offset losses from the drop in ASX's long position.| Sonic Healthcare vs. CSL | Sonic Healthcare vs. Tamawood | Sonic Healthcare vs. Cochlear | Sonic Healthcare vs. Rea Group |
| ASX vs. Bank of Queensland | ASX vs. Queste Communications | ASX vs. MetalsGrove Mining | ASX vs. Magellan Financial Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |