Correlation Between Sonida Senior and Mesa Air
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Mesa Air 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 Mesa Air 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 Mesa Air Group, you can compare the effects of market volatilities on Sonida Senior and Mesa Air 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 Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Mesa Air.
Diversification Opportunities for Sonida Senior and Mesa Air
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sonida and Mesa is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Mesa Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Air Group 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 Mesa Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Air Group has no effect on the direction of Sonida Senior i.e., Sonida Senior and Mesa Air go up and down completely randomly.
Pair Corralation between Sonida Senior and Mesa Air
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 0.68 times more return on investment than Mesa Air. However, Sonida Senior Living is 1.48 times less risky than Mesa Air. It trades about 0.01 of its potential returns per unit of risk. Mesa Air Group is currently generating about 0.0 per unit of risk. If you would invest 2,801 in Sonida Senior Living on August 31, 2024 and sell it today you would lose (195.00) from holding Sonida Senior Living or give up 6.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Mesa Air Group
Performance |
| Timeline |
| Sonida Senior Living |
| Mesa Air Group |
Sonida Senior and Mesa Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Mesa Air
The main advantage of trading using opposite Sonida Senior and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Mesa Air 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 Mesa Air will offset losses from the drop in Mesa Air'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 |
| Mesa Air vs. Allegiant Travel | Mesa Air vs. Sun Country Airlines | Mesa Air vs. Frontier Group Holdings | Mesa Air vs. Azul SA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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