Correlation Between Sonida Senior and Eastern
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Sonida Senior and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Eastern.
Diversification Opportunities for Sonida Senior and Eastern
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sonida and Eastern is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Sonida Senior i.e., Sonida Senior and Eastern go up and down completely randomly.
Pair Corralation between Sonida Senior and Eastern
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.21 times more return on investment than Eastern. However, Sonida Senior is 1.21 times more volatile than Eastern Co. It trades about 0.0 of its potential returns per unit of risk. Eastern Co is currently generating about -0.12 per unit of risk. If you would invest 2,631 in Sonida Senior Living on September 1, 2024 and sell it today you would lose (25.00) from holding Sonida Senior Living or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Eastern Co
Performance |
| Timeline |
| Sonida Senior Living |
| Eastern |
Sonida Senior and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Eastern
The main advantage of trading using opposite Sonida Senior and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern'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 |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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