Correlation Between Sonida Senior and Medical Facilities
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Medical Facilities 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 Medical Facilities 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 Medical Facilities, you can compare the effects of market volatilities on Sonida Senior and Medical Facilities 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 Medical Facilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Medical Facilities.
Diversification Opportunities for Sonida Senior and Medical Facilities
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sonida and Medical is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Medical Facilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Facilities 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 Medical Facilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Facilities has no effect on the direction of Sonida Senior i.e., Sonida Senior and Medical Facilities go up and down completely randomly.
Pair Corralation between Sonida Senior and Medical Facilities
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.87 times more return on investment than Medical Facilities. However, Sonida Senior is 1.87 times more volatile than Medical Facilities. It trades about 0.04 of its potential returns per unit of risk. Medical Facilities is currently generating about 0.07 per unit of risk. If you would invest 1,626 in Sonida Senior Living on August 25, 2024 and sell it today you would earn a total of 857.00 from holding Sonida Senior Living or generate 52.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.54% |
| Values | Daily Returns |
Sonida Senior Living vs. Medical Facilities
Performance |
| Timeline |
| Sonida Senior Living |
| Medical Facilities |
Sonida Senior and Medical Facilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Medical Facilities
The main advantage of trading using opposite Sonida Senior and Medical Facilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Medical Facilities 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 Medical Facilities will offset losses from the drop in Medical Facilities' long position.| Sonida Senior vs. Heartbeam | Sonida Senior vs. EUDA Health Holdings | Sonida Senior vs. Nutex Health | Sonida Senior vs. Healthcare Triangle |
| Medical Facilities vs. Jack Nathan Medical | Medical Facilities vs. Fresenius SE Co | Medical Facilities vs. Ramsay Health Care | Medical Facilities vs. Pennant Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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