Correlation Between Sonida Senior and Fleetcor Technologies

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

Diversification Opportunities for Sonida Senior and Fleetcor Technologies

-0.27

Correlation Coefficient

Sonida Senior  Fleetcor Technologies

Very good diversification

The 3 months correlation between Sonida and Fleetcor is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Fleetcor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fleetcor Technologies 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 Fleetcor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fleetcor Technologies has no effect on the direction of Sonida Senior i.e., Sonida Senior and Fleetcor Technologies go up and down completely randomly.

Pair Corralation between Sonida Senior and Fleetcor Technologies

Given the investment horizon of 90 days Sonida Senior Living is expected to generate 5.3 times more return on investment than Fleetcor Technologies. However, Sonida Senior is 5.3 times more volatile than Fleetcor Technologies. It trades about -0.03 of its potential returns per unit of risk. Fleetcor Technologies is currently generating about -0.91 per unit of risk. If you would invest  3,260  in Sonida Senior Living on September 13, 2024 and sell it today you would lose (868.00) from holding Sonida Senior Living or give up 26.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.48%
Values	Daily Returns

Sonida Senior Living  vs.  Fleetcor Technologies

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 conflicting 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.

Fleetcor Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fleetcor Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Fleetcor Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sonida Senior and Fleetcor Technologies

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

The idea behind Sonida Senior Living and Fleetcor Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.