Correlation Between Sienna Senior and Ensign
Can any of the company-specific risk be diversified away by investing in both Sienna Senior and Ensign 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 Sienna Senior and Ensign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sienna Senior Living and The Ensign Group, you can compare the effects of market volatilities on Sienna Senior and Ensign 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 Sienna Senior with a short position of Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sienna Senior and Ensign.
Diversification Opportunities for Sienna Senior and Ensign
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sienna and Ensign is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sienna Senior Living and The Ensign Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Group and Sienna 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 Sienna Senior Living are associated (or correlated) with Ensign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Group has no effect on the direction of Sienna Senior i.e., Sienna Senior and Ensign go up and down completely randomly.
Pair Corralation between Sienna Senior and Ensign
Assuming the 90 days horizon Sienna Senior Living is expected to generate 1.44 times more return on investment than Ensign. However, Sienna Senior is 1.44 times more volatile than The Ensign Group. It trades about 0.05 of its potential returns per unit of risk. The Ensign Group is currently generating about 0.06 per unit of risk. If you would invest 646.00 in Sienna Senior Living on October 13, 2024 and sell it today you would earn a total of 334.00 from holding Sienna Senior Living or generate 51.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sienna Senior Living vs. The Ensign Group
Performance |
| Timeline |
| Sienna Senior Living |
| Ensign Group |
Sienna Senior and Ensign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sienna Senior and Ensign
The main advantage of trading using opposite Sienna Senior and Ensign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sienna Senior position performs unexpectedly, Ensign 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 Ensign will offset losses from the drop in Ensign's long position.| Sienna Senior vs. Amkor Technology | Sienna Senior vs. Hanison Construction Holdings | Sienna Senior vs. BJs Restaurants | Sienna Senior vs. ASPEN TECHINC DL |
| Ensign vs. Jupiter Fund Management | Ensign vs. Singapore Airlines Limited | Ensign vs. United Airlines Holdings | Ensign vs. Q2M Managementberatung AG |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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