Correlation Between Sonida Senior and 857477AY9

Can any of the company-specific risk be diversified away by investing in both Sonida Senior and 857477AY9 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 857477AY9 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 STT 5769 15 JUN 47, you can compare the effects of market volatilities on Sonida Senior and 857477AY9 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 857477AY9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and 857477AY9.

Diversification Opportunities for Sonida Senior and 857477AY9

-0.45

Correlation Coefficient

Sonida Senior  857477AY9

Very good diversification

The 3 months correlation between Sonida and 857477AY9 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and STT 5769 15 JUN 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STT 5769 15 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 857477AY9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STT 5769 15 has no effect on the direction of Sonida Senior i.e., Sonida Senior and 857477AY9 go up and down completely randomly.

Pair Corralation between Sonida Senior and 857477AY9

Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.02 times more return on investment than 857477AY9. However, Sonida Senior is 1.02 times more volatile than STT 5769 15 JUN 47. It trades about -0.01 of its potential returns per unit of risk. STT 5769 15 JUN 47 is currently generating about -0.07 per unit of risk. If you would invest  2,725  in Sonida Senior Living on September 3, 2024 and sell it today you would lose (119.00) from holding Sonida Senior Living or give up 4.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.94%
Values	Daily Returns

Sonida Senior Living  vs.  STT 5769 15 JUN 47

Sonida Senior Living

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sonida Senior Living has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Sonida Senior is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

STT 5769 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STT 5769 15 JUN 47 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for STT 5769 15 JUN 47 investors.

Pair Trading with Sonida Senior and 857477AY9

The main advantage of trading using opposite Sonida Senior and 857477AY9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, 857477AY9 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 857477AY9 will offset losses from the drop in 857477AY9's long position.

The idea behind Sonida Senior Living and STT 5769 15 JUN 47 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.