Correlation Between Medical Facilities and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both Medical Facilities 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 Medical Facilities and Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Facilities and Sonida Senior Living, you can compare the effects of market volatilities on Medical Facilities 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 Medical Facilities with a short position of Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Facilities and Sonida Senior.
Diversification Opportunities for Medical Facilities and Sonida Senior
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medical and Sonida is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Medical Facilities 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 Medical Facilities 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 Medical Facilities 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 Medical Facilities i.e., Medical Facilities and Sonida Senior go up and down completely randomly.
Pair Corralation between Medical Facilities and Sonida Senior
Assuming the 90 days horizon Medical Facilities is expected to generate 1.07 times less return on investment than Sonida Senior. But when comparing it to its historical volatility, Medical Facilities is 1.87 times less risky than Sonida Senior. It trades about 0.07 of its potential returns per unit of risk. Sonida Senior Living is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,626 in Sonida Senior Living on August 25, 2024 and sell it today you would earn a total of 857.00 from holding Sonida Senior Living or generate 52.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.54% |
| Values | Daily Returns |
Medical Facilities vs. Sonida Senior Living
Performance |
| Timeline |
| Medical Facilities |
| Sonida Senior Living |
Medical Facilities and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Facilities and Sonida Senior
The main advantage of trading using opposite Medical Facilities and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Facilities 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.| Medical Facilities vs. Jack Nathan Medical | Medical Facilities vs. Fresenius SE Co | Medical Facilities vs. Ramsay Health Care | Medical Facilities vs. Pennant Group |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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