Correlation Between Sonida Senior and Ihuman
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Ihuman 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 Ihuman 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 Ihuman Inc, you can compare the effects of market volatilities on Sonida Senior and Ihuman 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 Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Ihuman.
Diversification Opportunities for Sonida Senior and Ihuman
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Ihuman is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Sonida Senior i.e., Sonida Senior and Ihuman go up and down completely randomly.
Pair Corralation between Sonida Senior and Ihuman
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.36 times more return on investment than Ihuman. However, Sonida Senior is 1.36 times more volatile than Ihuman Inc. It trades about 0.06 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.14 per unit of risk. If you would invest 2,524 in Sonida Senior Living on September 3, 2024 and sell it today you would earn a total of 82.00 from holding Sonida Senior Living or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Ihuman Inc
Performance |
| Timeline |
| Sonida Senior Living |
| Ihuman Inc |
Sonida Senior and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Ihuman
The main advantage of trading using opposite Sonida Senior and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman's long position.| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. Acadia Healthcare |
| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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