Correlation Between Elevation Oncology and Sonida Senior

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

By analyzing existing cross correlation between Elevation Oncology and Sonida Senior Living, you can compare the effects of market volatilities on Elevation Oncology and Sonida Senior 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 Elevation Oncology with a short position of Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevation Oncology and Sonida Senior.

Diversification Opportunities for Elevation Oncology and Sonida Senior

0.65

Correlation Coefficient

Elevation Oncology  Sonida Senior

Poor diversification

The 3 months correlation between Elevation and Sonida is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Elevation Oncology and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living and Elevation Oncology 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 Elevation Oncology are associated (or correlated) with Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of Elevation Oncology i.e., Elevation Oncology and Sonida Senior go up and down completely randomly.

Pair Corralation between Elevation Oncology and Sonida Senior

Given the investment horizon of 90 days Elevation Oncology is expected to under-perform the Sonida Senior. In addition to that, Elevation Oncology is 2.14 times more volatile than Sonida Senior Living. It trades about -0.15 of its total potential returns per unit of risk. Sonida Senior Living is currently generating about 0.26 per unit of volatility. If you would invest  2,798  in Sonida Senior Living on February 7, 2024 and sell it today you would earn a total of  441.00  from holding Sonida Senior Living or generate 15.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Elevation Oncology  vs.  Sonida Senior Living

Elevation Oncology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Oncology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Elevation Oncology showed solid returns over the last few months and may actually be approaching a breakup point.

Sonida Senior Living

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sonida Senior Living are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Sonida Senior sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elevation Oncology and Sonida Senior

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

The idea behind Elevation Oncology and Sonida Senior Living 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.