Correlation Between Sonida Senior and Guangdong Investment
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Guangdong Investment 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 Guangdong Investment 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 Guangdong Investment Limited, you can compare the effects of market volatilities on Sonida Senior and Guangdong Investment 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 Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Guangdong Investment.
Diversification Opportunities for Sonida Senior and Guangdong Investment
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sonida and Guangdong is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Investment 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 Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of Sonida Senior i.e., Sonida Senior and Guangdong Investment go up and down completely randomly.
Pair Corralation between Sonida Senior and Guangdong Investment
Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the Guangdong Investment. In addition to that, Sonida Senior is 1.8 times more volatile than Guangdong Investment Limited. It trades about -0.06 of its total potential returns per unit of risk. Guangdong Investment Limited is currently generating about -0.11 per unit of volatility. If you would invest 64.00 in Guangdong Investment Limited on August 28, 2024 and sell it today you would lose (3.00) from holding Guangdong Investment Limited or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Guangdong Investment Limited
Performance |
| Timeline |
| Sonida Senior Living |
| Guangdong Investment |
Sonida Senior and Guangdong Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Guangdong Investment
The main advantage of trading using opposite Sonida Senior and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Guangdong Investment 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's long position.| Sonida Senior vs. Nutex Health | Sonida Senior vs. Healthcare Triangle | Sonida Senior vs. Mangoceuticals, Common Stock | Sonida Senior vs. Aclarion |
| Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. Guangdong Investment | Guangdong Investment vs. Anhui Conch Cement | Guangdong Investment vs. Beijing Enterprises Water |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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