Correlation Between Discover Financial and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both Discover Financial 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 Discover Financial and Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and Sonida Senior Living, you can compare the effects of market volatilities on Discover Financial 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 Discover Financial with a short position of Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and Sonida Senior.
Diversification Opportunities for Discover Financial and Sonida Senior
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Discover and Sonida is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services 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 Discover Financial 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 Discover Financial Services 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 Discover Financial i.e., Discover Financial and Sonida Senior go up and down completely randomly.
Pair Corralation between Discover Financial and Sonida Senior
Considering the 90-day investment horizon Discover Financial is expected to generate 2.14 times less return on investment than Sonida Senior. But when comparing it to its historical volatility, Discover Financial Services is 2.01 times less risky than Sonida Senior. It trades about 0.09 of its potential returns per unit of risk. Sonida Senior Living is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 667.00 in Sonida Senior Living on August 26, 2024 and sell it today you would earn a total of 1,816 from holding Sonida Senior Living or generate 272.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Discover Financial Services vs. Sonida Senior Living
Performance |
| Timeline |
| Discover Financial |
| Sonida Senior Living |
Discover Financial and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and Sonida Senior
The main advantage of trading using opposite Discover Financial and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial 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.| Discover Financial vs. Ally Financial | Discover Financial vs. Synchrony Financial | Discover Financial vs. Western Union Co | Discover Financial vs. Bread Financial Holdings |
| Sonida Senior vs. Heartbeam | Sonida Senior vs. EUDA Health Holdings | Sonida Senior vs. Nutex Health | Sonida Senior vs. Healthcare Triangle |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |