Correlation Between Sonic Healthcare and Oneview Healthcare

Can any of the company-specific risk be diversified away by investing in both Sonic Healthcare and Oneview Healthcare 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 Oneview Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sonic Healthcare and Oneview Healthcare PLC, you can compare the effects of market volatilities on Sonic Healthcare and Oneview Healthcare 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 Oneview Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Healthcare and Oneview Healthcare.

Diversification Opportunities for Sonic Healthcare and Oneview Healthcare

0.36

Correlation Coefficient

Sonic Healthcare  Oneview Healthcare

Weak diversification

The 3 months correlation between Sonic and Oneview is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Healthcare and Oneview Healthcare PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oneview Healthcare PLC 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 Oneview Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oneview Healthcare PLC has no effect on the direction of Sonic Healthcare i.e., Sonic Healthcare and Oneview Healthcare go up and down completely randomly.

Pair Corralation between Sonic Healthcare and Oneview Healthcare

Assuming the 90 days trading horizon Sonic Healthcare is expected to generate 85.72 times less return on investment than Oneview Healthcare. But when comparing it to its historical volatility, Sonic Healthcare is 1.69 times less risky than Oneview Healthcare. It trades about 0.01 of its potential returns per unit of risk. Oneview Healthcare PLC is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Oneview Healthcare PLC on November 29, 2024 and sell it today you would earn a total of  6.00  from holding Oneview Healthcare PLC or generate 20.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sonic Healthcare  vs.  Oneview Healthcare PLC

Sonic Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sonic Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Sonic Healthcare is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Oneview Healthcare PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oneview Healthcare PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Oneview Healthcare may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Sonic Healthcare and Oneview Healthcare

The main advantage of trading using opposite Sonic Healthcare and Oneview Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Healthcare position performs unexpectedly, Oneview Healthcare 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 Oneview Healthcare will offset losses from the drop in Oneview Healthcare's long position.

The idea behind Sonic Healthcare and Oneview Healthcare PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.