Correlation Between Sonic Healthcare and Kingsrose Mining
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Kingsrose Mining 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 Kingsrose Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and Kingsrose Mining, you can compare the effects of market volatilities on Sonic Healthcare and Kingsrose Mining 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 Kingsrose Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Kingsrose Mining.
Diversification Opportunities for Sonic Healthcare and Kingsrose Mining
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sonic and Kingsrose is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and Kingsrose Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsrose Mining 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 Kingsrose Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsrose Mining has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Kingsrose Mining go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Kingsrose Mining
Assuming the 90 days trading horizon Sonic Healthcare is expected to generate 0.35 times more return on investment than Kingsrose Mining. However, Sonic Healthcare is 2.87 times less risky than Kingsrose Mining. It trades about 0.16 of its potential returns per unit of risk. Kingsrose Mining is currently generating about -0.04 per unit of risk. If you would invest 2,693 in Sonic Healthcare on September 1, 2024 and sell it today you would earn a total of 164.00 from holding Sonic Healthcare or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare vs. Kingsrose Mining
Performance |
| Timeline |
| Sonic Healthcare |
| Kingsrose Mining |
Sonic Healthcare and Kingsrose Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Kingsrose Mining
The main advantage of trading using opposite Sonic Healthcare and Kingsrose Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Kingsrose Mining 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 Kingsrose Mining will offset losses from the drop in Kingsrose Mining's long position.| Sonic Healthcare vs. Aneka Tambang Tbk | Sonic Healthcare vs. ANZ Group Holdings | Sonic Healthcare vs. Australia and New | Sonic Healthcare vs. ANZ Group Holdings |
| Kingsrose Mining vs. Northern Star Resources | Kingsrose Mining vs. Evolution Mining | Kingsrose Mining vs. Bluescope Steel | Kingsrose Mining vs. Sandfire Resources NL |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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