Correlation Between Sonic Healthcare and Thorney Technologies
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Thorney Technologies 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 Thorney Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and Thorney Technologies, you can compare the effects of market volatilities on Sonic Healthcare and Thorney Technologies 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 Thorney Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Thorney Technologies.
Diversification Opportunities for Sonic Healthcare and Thorney Technologies
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sonic and Thorney is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and Thorney Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thorney Technologies 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 Thorney Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thorney Technologies has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Thorney Technologies go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Thorney Technologies
If you would invest 2,783 in Sonic Healthcare on November 7, 2024 and sell it today you would earn a total of 72.00 from holding Sonic Healthcare or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare vs. Thorney Technologies
Performance |
| Timeline |
| Sonic Healthcare |
| Thorney Technologies |
Sonic Healthcare and Thorney Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Thorney Technologies
The main advantage of trading using opposite Sonic Healthcare and Thorney Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Thorney Technologies 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 Thorney Technologies will offset losses from the drop in Thorney Technologies' long position.| Sonic Healthcare vs. Cleanaway Waste Management | Sonic Healthcare vs. Sports Entertainment Group | Sonic Healthcare vs. BKI Investment | Sonic Healthcare vs. Regal Funds Management |
| Thorney Technologies vs. Lendlease Group | Thorney Technologies vs. Pure Foods Tasmania | Thorney Technologies vs. Ainsworth Game Technology | Thorney Technologies vs. Clime Investment Management |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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