Correlation Between Sonida Senior and Aperture Health

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

Diversification Opportunities for Sonida Senior and Aperture Health

0.0

Correlation Coefficient

Sonida Senior  Aperture Health

Pay attention - limited upside

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

Pair Corralation between Sonida Senior and Aperture Health

If you would invest  2,319  in Sonida Senior Living on October 26, 2024 and sell it today you would earn a total of  75.00  from holding Sonida Senior Living or generate 3.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Sonida Senior Living  vs.  Aperture Health

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.

Aperture Health

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sonida Senior and Aperture Health

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

The idea behind Sonida Senior Living and Aperture Health 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..