Correlation Between Sonic Healthcare and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Thermo Fisher 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 Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonic Healthcare Limited and Thermo Fisher Scientific, you can compare the effects of market volatilities on Sonic Healthcare and Thermo Fisher 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 Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Thermo Fisher.
Diversification Opportunities for Sonic Healthcare and Thermo Fisher
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonic and Thermo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare Limited and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific 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 Limited are associated (or correlated) with Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Thermo Fisher go up and down completely randomly.
Pair Corralation between Sonic Healthcare and Thermo Fisher
Assuming the 90 days horizon Sonic Healthcare Limited is expected to generate 2.47 times more return on investment than Thermo Fisher. However, Sonic Healthcare is 2.47 times more volatile than Thermo Fisher Scientific. It trades about 0.01 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about 0.0 per unit of risk. If you would invest 1,918 in Sonic Healthcare Limited on September 4, 2024 and sell it today you would lose (214.00) from holding Sonic Healthcare Limited or give up 11.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.97% |
| Values | Daily Returns |
Sonic Healthcare Limited vs. Thermo Fisher Scientific
Performance |
| Timeline |
| Sonic Healthcare |
| Thermo Fisher Scientific |
Sonic Healthcare and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonic Healthcare and Thermo Fisher
The main advantage of trading using opposite Sonic Healthcare and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Thermo Fisher 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 Thermo Fisher will offset losses from the drop in Thermo Fisher's long position.| Sonic Healthcare vs. Lonza Group AG | Sonic Healthcare vs. Personalis | Sonic Healthcare vs. Applied DNA Sciences | Sonic Healthcare vs. ProPhase Labs |
| Thermo Fisher vs. Agilent Technologies | Thermo Fisher vs. IDEXX Laboratories | Thermo Fisher vs. Illumina | Thermo Fisher vs. Waters |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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