Correlation Between Sonida Senior and Fomento Economico
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Fomento Economico 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 Fomento Economico 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 Fomento Economico Mexicano, you can compare the effects of market volatilities on Sonida Senior and Fomento Economico 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 Fomento Economico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Fomento Economico.
Diversification Opportunities for Sonida Senior and Fomento Economico
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonida and Fomento is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Fomento Economico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Economico 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 Fomento Economico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Economico has no effect on the direction of Sonida Senior i.e., Sonida Senior and Fomento Economico go up and down completely randomly.
Pair Corralation between Sonida Senior and Fomento Economico
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 3.08 times more return on investment than Fomento Economico. However, Sonida Senior is 3.08 times more volatile than Fomento Economico Mexicano. It trades about 0.1 of its potential returns per unit of risk. Fomento Economico Mexicano is currently generating about -0.07 per unit of risk. If you would invest 952.00 in Sonida Senior Living on September 4, 2024 and sell it today you would earn a total of 1,557 from holding Sonida Senior Living or generate 163.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Fomento Economico Mexicano
Performance |
| Timeline |
| Sonida Senior Living |
| Fomento Economico |
Sonida Senior and Fomento Economico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Fomento Economico
The main advantage of trading using opposite Sonida Senior and Fomento Economico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Fomento Economico 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 Fomento Economico will offset losses from the drop in Fomento Economico's long position.| Sonida Senior vs. Baxter International | Sonida Senior vs. West Pharmaceutical Services | Sonida Senior vs. ResMed Inc | Sonida Senior vs. The Cooper Companies, |
| Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |