Correlation Between Sonida Senior and Northern Lights
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Northern Lights 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 Northern Lights 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 Northern Lights, you can compare the effects of market volatilities on Sonida Senior and Northern Lights 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 Northern Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Northern Lights.
Diversification Opportunities for Sonida Senior and Northern Lights
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Northern is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Northern Lights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lights 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 Northern Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lights has no effect on the direction of Sonida Senior i.e., Sonida Senior and Northern Lights go up and down completely randomly.
Pair Corralation between Sonida Senior and Northern Lights
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 4.39 times more return on investment than Northern Lights. However, Sonida Senior is 4.39 times more volatile than Northern Lights. It trades about 0.0 of its potential returns per unit of risk. Northern Lights is currently generating about -0.08 per unit of risk. If you would invest 2,476 in Sonida Senior Living on September 12, 2024 and sell it today you would lose (20.00) from holding Sonida Senior Living or give up 0.81% 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. Northern Lights
Performance |
| Timeline |
| Sonida Senior Living |
| Northern Lights |
Sonida Senior and Northern Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Northern Lights
The main advantage of trading using opposite Sonida Senior and Northern Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Northern Lights 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 Northern Lights will offset losses from the drop in Northern Lights' 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 |
| Northern Lights vs. Freedom Day Dividend | Northern Lights vs. Franklin Templeton ETF | Northern Lights vs. iShares MSCI China | Northern Lights vs. Tidal Trust II |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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