Correlation Between Sonida Senior and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Maanshan Iron 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 Maanshan Iron 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 Maanshan Iron Steel, you can compare the effects of market volatilities on Sonida Senior and Maanshan Iron 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 Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Maanshan Iron.
Diversification Opportunities for Sonida Senior and Maanshan Iron
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Maanshan is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel 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 Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Sonida Senior i.e., Sonida Senior and Maanshan Iron go up and down completely randomly.
Pair Corralation between Sonida Senior and Maanshan Iron
Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the Maanshan Iron. But the stock apears to be less risky and, when comparing its historical volatility, Sonida Senior Living is 1.56 times less risky than Maanshan Iron. The stock trades about -0.02 of its potential returns per unit of risk. The Maanshan Iron Steel is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Maanshan Iron Steel on September 3, 2024 and sell it today you would lose (2.00) from holding Maanshan Iron Steel or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Maanshan Iron Steel
Performance |
| Timeline |
| Sonida Senior Living |
| Maanshan Iron Steel |
Sonida Senior and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Maanshan Iron
The main advantage of trading using opposite Sonida Senior and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Maanshan Iron 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 Maanshan Iron will offset losses from the drop in Maanshan Iron'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 |
| Maanshan Iron vs. Ta Chen Stainless | Maanshan Iron vs. Gerdau SA | Maanshan Iron vs. Gerdau SA | Maanshan Iron vs. Nucor Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |