Correlation Between Sonic Healthcare and XTC Lithium
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and XTC Lithium 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 XTC Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare and XTC Lithium Limited, you can compare the effects of market volatilities on Sonic Healthcare and XTC Lithium 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 XTC Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and XTC Lithium.
Diversification Opportunities for Sonic Healthcare and XTC Lithium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sonic and XTC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and XTC Lithium Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTC Lithium Limited 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 XTC Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTC Lithium Limited has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and XTC Lithium go up and down completely randomly.
Pair Corralation between Sonic Healthcare and XTC Lithium
Assuming the 90 days trading horizon Sonic Healthcare is expected to under-perform the XTC Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Sonic Healthcare is 8.06 times less risky than XTC Lithium. The stock trades about -0.02 of its potential returns per unit of risk. The XTC Lithium Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 36.00 in XTC Lithium Limited on August 31, 2024 and sell it today you would lose (16.00) from holding XTC Lithium Limited or give up 44.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonic Healthcare vs. XTC Lithium Limited
Performance |
| Timeline |
| Sonic Healthcare |
| XTC Lithium Limited |
Sonic Healthcare and XTC Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and XTC Lithium
The main advantage of trading using opposite Sonic Healthcare and XTC Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, XTC Lithium 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 XTC Lithium will offset losses from the drop in XTC Lithium's long position.| Sonic Healthcare vs. Perseus Mining | Sonic Healthcare vs. Black Rock Mining | Sonic Healthcare vs. BTC Health Limited | Sonic Healthcare vs. M3 Mining |
| XTC Lithium vs. Regis Healthcare | XTC Lithium vs. Sonic Healthcare | XTC Lithium vs. TPG Telecom | XTC Lithium vs. Ramsay Health Care |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |