Correlation Between Avita Medical and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both Avita Medical 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 Avita Medical and Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and Sonida Senior Living, you can compare the effects of market volatilities on Avita Medical 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 Avita Medical with a short position of Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and Sonida Senior.
Diversification Opportunities for Avita Medical and Sonida Senior
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avita and Sonida is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical 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 Avita Medical 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 Avita Medical 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 Avita Medical i.e., Avita Medical and Sonida Senior go up and down completely randomly.
Pair Corralation between Avita Medical and Sonida Senior
Given the investment horizon of 90 days Avita Medical is expected to generate 13.58 times less return on investment than Sonida Senior. In addition to that, Avita Medical is 1.17 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 0.12 per unit of volatility. If you would invest 2,259 in Sonida Senior Living on September 14, 2024 and sell it today you would earn a total of 133.00 from holding Sonida Senior Living or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avita Medical vs. Sonida Senior Living
Performance |
| Timeline |
| Avita Medical |
| Sonida Senior Living |
Avita Medical and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avita Medical and Sonida Senior
The main advantage of trading using opposite Avita Medical and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical 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.| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
| Sonida Senior vs. Avita Medical | Sonida Senior vs. Sight Sciences | Sonida Senior vs. Treace Medical Concepts | Sonida Senior vs. Neuropace |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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