Correlation Between Sonida Senior and Travelzoo

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

Diversification Opportunities for Sonida Senior and Travelzoo

-0.1

Correlation Coefficient

Sonida Senior  Travelzoo

Good diversification

The 3 months correlation between Sonida and Travelzoo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Travelzoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travelzoo 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 Travelzoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travelzoo has no effect on the direction of Sonida Senior i.e., Sonida Senior and Travelzoo go up and down completely randomly.

Pair Corralation between Sonida Senior and Travelzoo

Given the investment horizon of 90 days Sonida Senior is expected to generate 1.29 times less return on investment than Travelzoo. In addition to that, Sonida Senior is 1.19 times more volatile than Travelzoo. It trades about 0.05 of its total potential returns per unit of risk. Travelzoo is currently generating about 0.08 per unit of volatility. If you would invest  931.00  in Travelzoo on December 2, 2024 and sell it today you would earn a total of  716.00  from holding Travelzoo or generate 76.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sonida Senior Living  vs.  Travelzoo

Sonida Senior Living

Risk-Adjusted Performance

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.

Travelzoo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Travelzoo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Sonida Senior and Travelzoo

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

The idea behind Sonida Senior Living and Travelzoo 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..