Correlation Between Xtrackers MSCI and Sonida Senior

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

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

Diversification Opportunities for Xtrackers MSCI and Sonida Senior

0.36

Correlation Coefficient

Xtrackers MSCI  Sonida Senior

Weak diversification

The 3 months correlation between Xtrackers and Sonida is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI All 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 Xtrackers MSCI 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 Xtrackers MSCI All 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 Xtrackers MSCI i.e., Xtrackers MSCI and Sonida Senior go up and down completely randomly.

Pair Corralation between Xtrackers MSCI and Sonida Senior

If you would invest  2,807  in Xtrackers MSCI All on October 20, 2024 and sell it today you would earn a total of  0.00  from holding Xtrackers MSCI All or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

Xtrackers MSCI All  vs.  Sonida Senior Living

Xtrackers MSCI All

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers MSCI All has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Xtrackers MSCI is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Xtrackers MSCI and Sonida Senior

The main advantage of trading using opposite Xtrackers MSCI and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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 Xtrackers MSCI All 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.