Correlation Between Sonida Senior and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and RCS MediaGroup 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 RCS MediaGroup 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 RCS MediaGroup SpA, you can compare the effects of market volatilities on Sonida Senior and RCS MediaGroup 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 RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and RCS MediaGroup.
Diversification Opportunities for Sonida Senior and RCS MediaGroup
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonida and RCS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and RCS MediaGroup SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCS MediaGroup SpA 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 RCS MediaGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCS MediaGroup SpA has no effect on the direction of Sonida Senior i.e., Sonida Senior and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Sonida Senior and RCS MediaGroup
Given the investment horizon of 90 days Sonida Senior is expected to generate 2.99 times less return on investment than RCS MediaGroup. In addition to that, Sonida Senior is 1.81 times more volatile than RCS MediaGroup SpA. It trades about 0.02 of its total potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.08 per unit of volatility. If you would invest 92.00 in RCS MediaGroup SpA on December 5, 2024 and sell it today you would earn a total of 2.00 from holding RCS MediaGroup SpA or generate 2.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Sonida Senior Living vs. RCS MediaGroup SpA
Performance |
Timeline |
Sonida Senior Living |
RCS MediaGroup SpA |
Sonida Senior and RCS MediaGroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sonida Senior and RCS MediaGroup
The main advantage of trading using opposite Sonida Senior and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, RCS MediaGroup 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 RCS MediaGroup will offset losses from the drop in RCS MediaGroup's long position.Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. InnovAge Holding Corp |
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Check out your portfolio center.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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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