Correlation Between Rogers Sugar and Sienna Senior

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

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

Diversification Opportunities for Rogers Sugar and Sienna Senior

-0.55

Correlation Coefficient

Rogers Sugar  Sienna Senior

Excellent diversification

The 3 months correlation between Rogers and Sienna is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Sugar 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 Rogers Sugar 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 Rogers Sugar 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 Rogers Sugar i.e., Rogers Sugar and Sienna Senior go up and down completely randomly.

Pair Corralation between Rogers Sugar and Sienna Senior

Assuming the 90 days trading horizon Rogers Sugar is expected to under-perform the Sienna Senior. But the stock apears to be less risky and, when comparing its historical volatility, Rogers Sugar is 1.17 times less risky than Sienna Senior. The stock trades about -0.09 of its potential returns per unit of risk. The Sienna Senior Living is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,527  in Sienna Senior Living on December 29, 2024 and sell it today you would earn a total of  104.00  from holding Sienna Senior Living or generate 6.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Rogers Sugar  vs.  Sienna Senior Living

Rogers Sugar

Risk-Adjusted Performance

Very Weak

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

Sienna Senior Living

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sienna Senior Living are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sienna Senior may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Rogers Sugar and Sienna Senior

The main advantage of trading using opposite Rogers Sugar and Sienna Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Sugar 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 Rogers Sugar 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.