Correlation Between Sonida Senior and InnovAge Holding
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and InnovAge Holding 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 InnovAge Holding 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 InnovAge Holding Corp, you can compare the effects of market volatilities on Sonida Senior and InnovAge Holding 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 InnovAge Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and InnovAge Holding.
Diversification Opportunities for Sonida Senior and InnovAge Holding
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonida and InnovAge is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and InnovAge Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnovAge Holding Corp 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 InnovAge Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnovAge Holding Corp has no effect on the direction of Sonida Senior i.e., Sonida Senior and InnovAge Holding go up and down completely randomly.
Pair Corralation between Sonida Senior and InnovAge Holding
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.12 times more return on investment than InnovAge Holding. However, Sonida Senior is 1.12 times more volatile than InnovAge Holding Corp. It trades about 0.0 of its potential returns per unit of risk. InnovAge Holding Corp is currently generating about -0.27 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. InnovAge Holding Corp
Performance |
| Timeline |
| Sonida Senior Living |
| InnovAge Holding Corp |
Sonida Senior and InnovAge Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and InnovAge Holding
The main advantage of trading using opposite Sonida Senior and InnovAge Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, InnovAge Holding 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 InnovAge Holding will offset losses from the drop in InnovAge Holding'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 |
| InnovAge Holding vs. The Ensign Group | InnovAge Holding vs. Select Medical Holdings | InnovAge Holding vs. Encompass Health Corp | InnovAge Holding vs. Enhabit |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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