Correlation Between Sonida Senior and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and BW Offshore 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 BW Offshore 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 BW Offshore Limited, you can compare the effects of market volatilities on Sonida Senior and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and BW Offshore.
Diversification Opportunities for Sonida Senior and BW Offshore
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and BWOFY is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and BW Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore Limited 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore Limited has no effect on the direction of Sonida Senior i.e., Sonida Senior and BW Offshore go up and down completely randomly.
Pair Corralation between Sonida Senior and BW Offshore
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 0.83 times more return on investment than BW Offshore. However, Sonida Senior Living is 1.2 times less risky than BW Offshore. It trades about -0.07 of its potential returns per unit of risk. BW Offshore Limited is currently generating about -0.24 per unit of risk. If you would invest 2,311 in Sonida Senior Living on October 23, 2024 and sell it today you would lose (63.00) from holding Sonida Senior Living or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. BW Offshore Limited
Performance |
| Timeline |
| Sonida Senior Living |
| BW Offshore Limited |
Sonida Senior and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and BW Offshore
The main advantage of trading using opposite Sonida Senior and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore'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 |
| BW Offshore vs. FG Annuities Life | BW Offshore vs. Aterian | BW Offshore vs. Sun Country Airlines | BW Offshore vs. Cincinnati Financial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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