Correlation Between Sonida Senior and Lupaka Gold
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Lupaka Gold 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 Lupaka Gold 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 Lupaka Gold Corp, you can compare the effects of market volatilities on Sonida Senior and Lupaka Gold 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 Lupaka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Lupaka Gold.
Diversification Opportunities for Sonida Senior and Lupaka Gold
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Lupaka is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Lupaka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupaka Gold 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 Lupaka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupaka Gold Corp has no effect on the direction of Sonida Senior i.e., Sonida Senior and Lupaka Gold go up and down completely randomly.
Pair Corralation between Sonida Senior and Lupaka Gold
Given the investment horizon of 90 days Sonida Senior is expected to generate 13.63 times less return on investment than Lupaka Gold. But when comparing it to its historical volatility, Sonida Senior Living is 14.47 times less risky than Lupaka Gold. It trades about 0.1 of its potential returns per unit of risk. Lupaka Gold Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4.55 in Lupaka Gold Corp on August 29, 2024 and sell it today you would lose (1.72) from holding Lupaka Gold Corp or give up 37.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.64% |
| Values | Daily Returns |
Sonida Senior Living vs. Lupaka Gold Corp
Performance |
| Timeline |
| Sonida Senior Living |
| Lupaka Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sonida Senior and Lupaka Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Lupaka Gold
The main advantage of trading using opposite Sonida Senior and Lupaka Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Lupaka Gold 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 Lupaka Gold will offset losses from the drop in Lupaka Gold's long position.| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. InnovAge Holding Corp | Sonida Senior vs. Acadia Healthcare |
| Lupaka Gold vs. Ecovyst | Lupaka Gold vs. Ecolab Inc | Lupaka Gold vs. The Gap, | Lupaka Gold vs. Luxfer Holdings PLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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