Correlation Between Sonida Senior and Predictive Oncology

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

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

Diversification Opportunities for Sonida Senior and Predictive Oncology

-0.82

Correlation Coefficient

Sonida Senior  Predictive Oncology

Pay attention - limited upside

The 3 months correlation between Sonida and Predictive is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Predictive Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predictive Oncology and Sonida Senior 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 Sonida Senior Living are associated (or correlated) with Predictive Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predictive Oncology has no effect on the direction of Sonida Senior i.e., Sonida Senior and Predictive Oncology go up and down completely randomly.

Pair Corralation between Sonida Senior and Predictive Oncology

Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.14 times more return on investment than Predictive Oncology. However, Sonida Senior is 1.14 times more volatile than Predictive Oncology. It trades about 0.26 of its potential returns per unit of risk. Predictive Oncology is currently generating about -0.12 per unit of risk. If you would invest  1,197  in Sonida Senior Living on February 15, 2024 and sell it today you would earn a total of  2,059  from holding Sonida Senior Living or generate 172.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Sonida Senior Living  vs.  Predictive Oncology

Sonida Senior Living

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sonida Senior Living are ranked lower than 19 (%) 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.

Predictive Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Predictive Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Sonida Senior and Predictive Oncology

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

The idea behind Sonida Senior Living and Predictive Oncology 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.