Correlation Between Sonida Senior and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Aldel Financial 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 Aldel Financial 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 Aldel Financial II, you can compare the effects of market volatilities on Sonida Senior and Aldel Financial 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 Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Aldel Financial.
Diversification Opportunities for Sonida Senior and Aldel Financial
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Aldel is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II 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 Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of Sonida Senior i.e., Sonida Senior and Aldel Financial go up and down completely randomly.
Pair Corralation between Sonida Senior and Aldel Financial
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 35.97 times more return on investment than Aldel Financial. However, Sonida Senior is 35.97 times more volatile than Aldel Financial II. It trades about 0.01 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.0 per unit of risk. If you would invest 2,801 in Sonida Senior Living on August 31, 2024 and sell it today you would lose (195.00) from holding Sonida Senior Living or give up 6.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.05% |
| Values | Daily Returns |
Sonida Senior Living vs. Aldel Financial II
Performance |
| Timeline |
| Sonida Senior Living |
| Aldel Financial II |
Sonida Senior and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Aldel Financial
The main advantage of trading using opposite Sonida Senior and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. InnovAge Holding Corp |
| Aldel Financial vs. RBC Bearings Incorporated | Aldel Financial vs. CECO Environmental Corp | Aldel Financial vs. EMCOR Group | Aldel Financial vs. Simpson Manufacturing |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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