Correlation Between Sonida Senior and Aehr Test
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Aehr Test 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 Sonida Senior and Aehr Test into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonida Senior Living and Aehr Test Systems, you can compare the effects of market volatilities on Sonida Senior and Aehr Test 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 Sonida Senior with a short position of Aehr Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Aehr Test.
Diversification Opportunities for Sonida Senior and Aehr Test
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sonida and Aehr is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Aehr Test Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aehr Test Systems and Sonida Senior 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 Sonida Senior Living are associated (or correlated) with Aehr Test. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aehr Test Systems has no effect on the direction of Sonida Senior i.e., Sonida Senior and Aehr Test go up and down completely randomly.
Pair Corralation between Sonida Senior and Aehr Test
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 0.9 times more return on investment than Aehr Test. However, Sonida Senior Living is 1.12 times less risky than Aehr Test. It trades about 0.05 of its potential returns per unit of risk. Aehr Test Systems is currently generating about 0.0 per unit of risk. If you would invest 1,525 in Sonida Senior Living on September 3, 2024 and sell it today you would earn a total of 1,037 from holding Sonida Senior Living or generate 68.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sonida Senior Living vs. Aehr Test Systems
Performance |
| Timeline |
| Sonida Senior Living |
| Aehr Test Systems |
Sonida Senior and Aehr Test Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Aehr Test
The main advantage of trading using opposite Sonida Senior and Aehr Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Aehr Test 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 Aehr Test will offset losses from the drop in Aehr Test's long position.| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. Acadia Healthcare |
| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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