Correlation Between Sonic Healthcare and Centuria Capital
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Centuria Capital 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 Centuria Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and Centuria Capital, you can compare the effects of market volatilities on Sonic Healthcare and Centuria Capital 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 Centuria Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Centuria Capital.
Diversification Opportunities for Sonic Healthcare and Centuria Capital
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonic and Centuria is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and Centuria Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Capital 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 Centuria Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Capital has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Centuria Capital go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Centuria Capital
Assuming the 90 days trading horizon Sonic Healthcare is expected to generate 0.72 times more return on investment than Centuria Capital. However, Sonic Healthcare is 1.39 times less risky than Centuria Capital. It trades about 0.07 of its potential returns per unit of risk. Centuria Capital is currently generating about 0.04 per unit of risk. If you would invest 2,695 in Sonic Healthcare on September 12, 2024 and sell it today you would earn a total of 149.00 from holding Sonic Healthcare or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Sonic Healthcare vs. Centuria Capital
Performance |
| Timeline |
| Sonic Healthcare |
| Centuria Capital |
Sonic Healthcare and Centuria Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Centuria Capital
The main advantage of trading using opposite Sonic Healthcare and Centuria Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Centuria Capital 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 Centuria Capital will offset losses from the drop in Centuria Capital's long position.| Sonic Healthcare vs. Aeris Environmental | Sonic Healthcare vs. Retail Food Group | Sonic Healthcare vs. Farm Pride Foods | Sonic Healthcare vs. Falcon Metals |
| Centuria Capital vs. Perseus Mining | Centuria Capital vs. oOhMedia | Centuria Capital vs. Homeco Daily Needs | Centuria Capital vs. Centuria Industrial Reit |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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