Correlation Between Sonida Senior and Altria

Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Altria 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 Altria 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 Altria Group 995, you can compare the effects of market volatilities on Sonida Senior and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Altria.

Diversification Opportunities for Sonida Senior and Altria

-0.38

Correlation Coefficient

Sonida Senior  Altria

Very good diversification

The 3 months correlation between Sonida and Altria is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Altria Group 995 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 995 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group 995 has no effect on the direction of Sonida Senior i.e., Sonida Senior and Altria go up and down completely randomly.

Pair Corralation between Sonida Senior and Altria

Given the investment horizon of 90 days Sonida Senior is expected to generate 2.41 times less return on investment than Altria. In addition to that, Sonida Senior is 1.52 times more volatile than Altria Group 995. It trades about 0.02 of its total potential returns per unit of risk. Altria Group 995 is currently generating about 0.08 per unit of volatility. If you would invest  13,343  in Altria Group 995 on December 23, 2024 and sell it today you would earn a total of  648.00  from holding Altria Group 995 or generate 4.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.85%
Values	Daily Returns

Sonida Senior Living  vs.  Altria Group 995

Sonida Senior Living

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sonida Senior Living are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Altria Group 995

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altria Group 995 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Altria may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sonida Senior and Altria

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

The idea behind Sonida Senior Living and Altria Group 995 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..