Correlation Between Nutanix and Sienna Senior

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

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

Diversification Opportunities for Nutanix and Sienna Senior

-0.13

Correlation Coefficient

Nutanix  Sienna Senior

Good diversification

The 3 months correlation between Nutanix and Sienna is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and Sienna Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna Senior Living and Nutanix 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 Nutanix are associated (or correlated) with Sienna Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Senior Living has no effect on the direction of Nutanix i.e., Nutanix and Sienna Senior go up and down completely randomly.

Pair Corralation between Nutanix and Sienna Senior

Given the investment horizon of 90 days Nutanix is expected to generate 0.54 times more return on investment than Sienna Senior. However, Nutanix is 1.86 times less risky than Sienna Senior. It trades about 0.08 of its potential returns per unit of risk. Sienna Senior Living is currently generating about 0.04 per unit of risk. If you would invest  2,679  in Nutanix on October 3, 2024 and sell it today you would earn a total of  3,439  from holding Nutanix or generate 128.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.85%
Values	Daily Returns

Nutanix  vs.  Sienna Senior Living

Nutanix

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Nutanix is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Sienna Senior Living

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sienna Senior Living has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nutanix and Sienna Senior

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

The idea behind Nutanix and Sienna 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.