Correlation Between Sonida Senior and Amplifon SpA
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Amplifon SpA 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 Amplifon SpA 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 Amplifon SpA, you can compare the effects of market volatilities on Sonida Senior and Amplifon SpA 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 Amplifon SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Amplifon SpA.
Diversification Opportunities for Sonida Senior and Amplifon SpA
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sonida and Amplifon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Amplifon SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplifon SpA 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 Amplifon SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplifon SpA has no effect on the direction of Sonida Senior i.e., Sonida Senior and Amplifon SpA go up and down completely randomly.
Pair Corralation between Sonida Senior and Amplifon SpA
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 2.5 times more return on investment than Amplifon SpA. However, Sonida Senior is 2.5 times more volatile than Amplifon SpA. It trades about 0.11 of its potential returns per unit of risk. Amplifon SpA is currently generating about 0.13 per unit of risk. If you would invest 874.00 in Sonida Senior Living on September 3, 2024 and sell it today you would earn a total of 1,732 from holding Sonida Senior Living or generate 198.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 37.25% |
| Values | Daily Returns |
Sonida Senior Living vs. Amplifon SpA
Performance |
| Timeline |
| Sonida Senior Living |
| Amplifon SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sonida Senior and Amplifon SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Amplifon SpA
The main advantage of trading using opposite Sonida Senior and Amplifon SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Amplifon SpA 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 Amplifon SpA will offset losses from the drop in Amplifon SpA'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 |
| Amplifon SpA vs. Sonida Senior Living | Amplifon SpA vs. Cumberland Pharmaceuticals | Amplifon SpA vs. Aquestive Therapeutics | Amplifon SpA vs. Cardinal Health |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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