Correlation Between Sonida Senior and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Advanced Micro 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 Advanced Micro 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 Advanced Micro Devices, you can compare the effects of market volatilities on Sonida Senior and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Advanced Micro.
Diversification Opportunities for Sonida Senior and Advanced Micro
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Advanced is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Sonida Senior i.e., Sonida Senior and Advanced Micro go up and down completely randomly.
Pair Corralation between Sonida Senior and Advanced Micro
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.62 times more return on investment than Advanced Micro. However, Sonida Senior is 1.62 times more volatile than Advanced Micro Devices. It trades about 0.05 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.06 per unit of risk. If you would invest 1,332 in Sonida Senior Living on August 31, 2024 and sell it today you would earn a total of 1,274 from holding Sonida Senior Living or generate 95.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Advanced Micro Devices
Performance |
| Timeline |
| Sonida Senior Living |
| Advanced Micro Devices |
Sonida Senior and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Advanced Micro
The main advantage of trading using opposite Sonida Senior and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro'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 |
| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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