Correlation Between Sonic Healthcare and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Platinum Asset 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 Platinum Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and Platinum Asset Management, you can compare the effects of market volatilities on Sonic Healthcare and Platinum Asset 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 Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Platinum Asset.
Diversification Opportunities for Sonic Healthcare and Platinum Asset
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sonic and Platinum is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and Platinum Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asset Management 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 Platinum Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asset Management has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Platinum Asset go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Platinum Asset
Assuming the 90 days trading horizon Sonic Healthcare is expected to generate 0.55 times more return on investment than Platinum Asset. However, Sonic Healthcare is 1.81 times less risky than Platinum Asset. It trades about 0.16 of its potential returns per unit of risk. Platinum Asset Management is currently generating about -0.43 per unit of risk. If you would invest 2,669 in Sonic Healthcare on September 13, 2024 and sell it today you would earn a total of 159.00 from holding Sonic Healthcare or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare vs. Platinum Asset Management
Performance |
| Timeline |
| Sonic Healthcare |
| Platinum Asset Management |
Sonic Healthcare and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Platinum Asset
The main advantage of trading using opposite Sonic Healthcare and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Platinum Asset 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 Platinum Asset will offset losses from the drop in Platinum Asset'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 |
| Platinum Asset vs. Collins Foods | Platinum Asset vs. BTC Health Limited | Platinum Asset vs. Health and Plant | Platinum Asset 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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