Correlation Between Sonida Senior and Armm

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

Diversification Opportunities for Sonida Senior and Armm

0.0

Correlation Coefficient

Sonida Senior  Armm

Pay attention - limited upside

The 3 months correlation between Sonida and Armm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Armm Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armm Inc 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 Armm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armm Inc has no effect on the direction of Sonida Senior i.e., Sonida Senior and Armm go up and down completely randomly.

Pair Corralation between Sonida Senior and Armm

Given the investment horizon of 90 days Sonida Senior is expected to generate 7.65 times less return on investment than Armm. But when comparing it to its historical volatility, Sonida Senior Living is 9.75 times less risky than Armm. It trades about 0.05 of its potential returns per unit of risk. Armm Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  55.00  in Armm Inc on September 27, 2024 and sell it today you would lose (54.91) from holding Armm Inc or give up 99.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Sonida Senior Living  vs.  Armm Inc

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 weak 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.

Armm Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sonida Senior and Armm

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

The idea behind Sonida Senior Living and Armm Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.