Correlation Between Sonic Healthcare and Epsilon Healthcare
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Epsilon 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 Sonic Healthcare and Epsilon Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and Epsilon Healthcare, you can compare the effects of market volatilities on Sonic Healthcare and Epsilon 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 Sonic Healthcare with a short position of Epsilon Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Epsilon Healthcare.
Diversification Opportunities for Sonic Healthcare and Epsilon Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sonic and Epsilon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and Epsilon Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epsilon Healthcare 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 Epsilon Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epsilon Healthcare has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Epsilon Healthcare go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Epsilon Healthcare
If you would invest 2,724 in Sonic Healthcare on September 2, 2024 and sell it today you would earn a total of 133.00 from holding Sonic Healthcare or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare vs. Epsilon Healthcare
Performance |
| Timeline |
| Sonic Healthcare |
| Epsilon Healthcare |
Sonic Healthcare and Epsilon Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Epsilon Healthcare
The main advantage of trading using opposite Sonic Healthcare and Epsilon Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Epsilon 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 Epsilon Healthcare will offset losses from the drop in Epsilon Healthcare's long position.| Sonic Healthcare vs. Westpac Banking | Sonic Healthcare vs. iShares Global Healthcare | Sonic Healthcare vs. Australian Dairy Farms | Sonic Healthcare vs. Adriatic Metals Plc |
| Epsilon Healthcare vs. Aneka Tambang Tbk | Epsilon Healthcare vs. Woolworths | Epsilon Healthcare vs. Commonwealth Bank | Epsilon Healthcare vs. BHP Group Limited |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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