Correlation Between Sonic Healthcare and MFF Capital
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and MFF 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 MFF 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 MFF Capital Investments, you can compare the effects of market volatilities on Sonic Healthcare and MFF 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 MFF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and MFF Capital.
Diversification Opportunities for Sonic Healthcare and MFF Capital
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonic and MFF is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments 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 MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and MFF Capital go up and down completely randomly.
Pair Corralation between Sonic Healthcare and MFF Capital
Assuming the 90 days trading horizon Sonic Healthcare is expected to under-perform the MFF Capital. In addition to that, Sonic Healthcare is 1.2 times more volatile than MFF Capital Investments. It trades about 0.0 of its total potential returns per unit of risk. MFF Capital Investments is currently generating about 0.15 per unit of volatility. If you would invest 281.00 in MFF Capital Investments on September 26, 2024 and sell it today you would earn a total of 184.00 from holding MFF Capital Investments or generate 65.48% 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. MFF Capital Investments
Performance |
| Timeline |
| Sonic Healthcare |
| MFF Capital Investments |
Sonic Healthcare and MFF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and MFF Capital
The main advantage of trading using opposite Sonic Healthcare and MFF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, MFF 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 MFF Capital will offset losses from the drop in MFF Capital's long position.| Sonic Healthcare vs. Home Consortium | Sonic Healthcare vs. Australian Unity Office | Sonic Healthcare vs. oOhMedia | Sonic Healthcare vs. Maggie Beer Holdings |
| MFF Capital vs. EVE Health Group | MFF Capital vs. Fisher Paykel Healthcare | MFF Capital vs. Regis Healthcare | MFF Capital vs. Sonic Healthcare |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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