Correlation Between Sonida Senior and 655844CN6

Can any of the company-specific risk be diversified away by investing in both Sonida Senior and 655844CN6 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 655844CN6 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 NSC 37 15 MAR 53, you can compare the effects of market volatilities on Sonida Senior and 655844CN6 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 655844CN6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and 655844CN6.

Diversification Opportunities for Sonida Senior and 655844CN6

-0.02

Correlation Coefficient

Sonida Senior  655844CN6

Good diversification

The 3 months correlation between Sonida and 655844CN6 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and NSC 37 15 MAR 53 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSC 37 15 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 655844CN6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSC 37 15 has no effect on the direction of Sonida Senior i.e., Sonida Senior and 655844CN6 go up and down completely randomly.

Pair Corralation between Sonida Senior and 655844CN6

Given the investment horizon of 90 days Sonida Senior is expected to generate 11.14 times less return on investment than 655844CN6. But when comparing it to its historical volatility, Sonida Senior Living is 2.73 times less risky than 655844CN6. It trades about 0.04 of its potential returns per unit of risk. NSC 37 15 MAR 53 is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  7,218  in NSC 37 15 MAR 53 on October 27, 2024 and sell it today you would earn a total of  864.00  from holding NSC 37 15 MAR 53 or generate 11.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.42%
Values	Daily Returns

Sonida Senior Living  vs.  NSC 37 15 MAR 53

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.

NSC 37 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSC 37 15 MAR 53 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 655844CN6 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 655844CN6

The main advantage of trading using opposite Sonida Senior and 655844CN6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, 655844CN6 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 655844CN6 will offset losses from the drop in 655844CN6's long position.

The idea behind Sonida Senior Living and NSC 37 15 MAR 53 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.