Correlation Between China Natural and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both China Natural and Sonida Senior 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 China Natural and Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Natural Resources and Sonida Senior Living, you can compare the effects of market volatilities on China Natural and Sonida Senior 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 China Natural with a short position of Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Natural and Sonida Senior.
Diversification Opportunities for China Natural and Sonida Senior
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Sonida is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Natural Resources and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living and China Natural 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 China Natural Resources are associated (or correlated) with Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of China Natural i.e., China Natural and Sonida Senior go up and down completely randomly.
Pair Corralation between China Natural and Sonida Senior
Given the investment horizon of 90 days China Natural is expected to generate 2.03 times less return on investment than Sonida Senior. In addition to that, China Natural is 2.95 times more volatile than Sonida Senior Living. It trades about 0.01 of its total potential returns per unit of risk. Sonida Senior Living is currently generating about 0.08 per unit of volatility. If you would invest 912.00 in Sonida Senior Living on August 28, 2024 and sell it today you would earn a total of 1,616 from holding Sonida Senior Living or generate 177.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
China Natural Resources vs. Sonida Senior Living
Performance |
| Timeline |
| China Natural Resources |
| Sonida Senior Living |
China Natural and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Natural and Sonida Senior
The main advantage of trading using opposite China Natural and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Natural position performs unexpectedly, Sonida Senior 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 Sonida Senior will offset losses from the drop in Sonida Senior's long position.| China Natural vs. Seychelle Environmtl | China Natural vs. Vow ASA | China Natural vs. Eestech | China Natural vs. Energy and Water |
| Sonida Senior vs. Nutex Health | Sonida Senior vs. Mangoceuticals, Common Stock | Sonida Senior vs. Aclarion |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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