Correlation Between Sonida Senior and ANTA Sports

Can any of the company-specific risk be diversified away by investing in both Sonida Senior and ANTA Sports 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 ANTA Sports 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 ANTA Sports Products, you can compare the effects of market volatilities on Sonida Senior and ANTA Sports 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 ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and ANTA Sports.

Diversification Opportunities for Sonida Senior and ANTA Sports

0.56

Correlation Coefficient

Sonida Senior  ANTA Sports

Very weak diversification

The 3 months correlation between Sonida and ANTA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products 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 ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Sonida Senior i.e., Sonida Senior and ANTA Sports go up and down completely randomly.

Pair Corralation between Sonida Senior and ANTA Sports

Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the ANTA Sports. In addition to that, Sonida Senior is 1.05 times more volatile than ANTA Sports Products. It trades about -0.03 of its total potential returns per unit of risk. ANTA Sports Products is currently generating about -0.03 per unit of volatility. If you would invest  27,778  in ANTA Sports Products on October 25, 2024 and sell it today you would lose (1,628) from holding ANTA Sports Products or give up 5.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Sonida Senior Living  vs.  ANTA Sports Products

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 current stock price disturbance, may contribute to short-term losses for the investors.

ANTA Sports Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA Sports Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, ANTA Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sonida Senior and ANTA Sports

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

The idea behind Sonida Senior Living and ANTA Sports Products 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..