Correlation Between Hasbro and Sonida Senior

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Can any of the company-specific risk be diversified away by investing in both Hasbro 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 Hasbro and Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and Sonida Senior Living, you can compare the effects of market volatilities on Hasbro 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 Hasbro with a short position of Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Sonida Senior.

Diversification Opportunities for Hasbro and Sonida Senior

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Hasbro and Sonida is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc 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 Hasbro 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 Hasbro Inc 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 Hasbro i.e., Hasbro and Sonida Senior go up and down completely randomly.

Pair Corralation between Hasbro and Sonida Senior

Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.41 times more return on investment than Sonida Senior. However, Hasbro Inc is 2.46 times less risky than Sonida Senior. It trades about 0.06 of its potential returns per unit of risk. Sonida Senior Living is currently generating about 0.0 per unit of risk. If you would invest  5,739  in Hasbro Inc on August 30, 2024 and sell it today you would earn a total of  650.00  from holding Hasbro Inc or generate 11.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hasbro Inc  vs.  Sonida Senior Living

 Performance 
       Timeline  
Hasbro Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hasbro Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hasbro is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Sonida Senior Living 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 somewhat strong fundamental indicators, Sonida Senior is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Hasbro and Sonida Senior Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hasbro and Sonida Senior

The main advantage of trading using opposite Hasbro and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro 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.
The idea behind Hasbro Inc and Sonida Senior Living 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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