Correlation Between Sonida Senior and Carmell Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Carmell Therapeutics 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 Carmell Therapeutics 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 Carmell Therapeutics, you can compare the effects of market volatilities on Sonida Senior and Carmell Therapeutics 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 Carmell Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Carmell Therapeutics.
Diversification Opportunities for Sonida Senior and Carmell Therapeutics
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonida and Carmell is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Carmell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmell Therapeutics 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 Carmell Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmell Therapeutics has no effect on the direction of Sonida Senior i.e., Sonida Senior and Carmell Therapeutics go up and down completely randomly.
Pair Corralation between Sonida Senior and Carmell Therapeutics
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 0.28 times more return on investment than Carmell Therapeutics. However, Sonida Senior Living is 3.58 times less risky than Carmell Therapeutics. It trades about 0.11 of its potential returns per unit of risk. Carmell Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 874.00 in Sonida Senior Living on September 2, 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 Together |
| Strength | Weak |
| Accuracy | 31.45% |
| Values | Daily Returns |
Sonida Senior Living vs. Carmell Therapeutics
Performance |
| Timeline |
| Sonida Senior Living |
| Carmell Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Sonida Senior and Carmell Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Carmell Therapeutics
The main advantage of trading using opposite Sonida Senior and Carmell Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Carmell Therapeutics 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 Carmell Therapeutics will offset losses from the drop in Carmell Therapeutics' 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 |
| Carmell Therapeutics vs. Sonida Senior Living | Carmell Therapeutics vs. Akanda Corp | Carmell Therapeutics vs. IPG Photonics | Carmell Therapeutics vs. NextNav Warrant |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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