Correlation Between Dalata Hotel and Sonida Senior

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

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

Diversification Opportunities for Dalata Hotel and Sonida Senior

0.0

Correlation Coefficient

Dalata Hotel  Sonida Senior

Pay attention - limited upside

The 3 months correlation between Dalata and Sonida is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group 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 Dalata Hotel 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 Dalata Hotel Group 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 Dalata Hotel i.e., Dalata Hotel and Sonida Senior go up and down completely randomly.

Pair Corralation between Dalata Hotel and Sonida Senior

Assuming the 90 days horizon Dalata Hotel Group is expected to under-perform the Sonida Senior. But the otc stock apears to be less risky and, when comparing its historical volatility, Dalata Hotel Group is 16.3 times less risky than Sonida Senior. The otc stock trades about -0.03 of its potential returns per unit of risk. The Sonida Senior Living is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  966.00  in Sonida Senior Living on September 24, 2024 and sell it today you would earn a total of  1,404  from holding Sonida Senior Living or generate 145.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Dalata Hotel Group  vs.  Sonida Senior Living

Dalata Hotel Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dalata Hotel Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dalata Hotel is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 latest inconsistent performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Dalata Hotel and Sonida Senior

The main advantage of trading using opposite Dalata Hotel and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel 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 Dalata Hotel Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..