Correlation Between Sonida Senior and Onity
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Onity 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 Onity 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 Onity Group, you can compare the effects of market volatilities on Sonida Senior and Onity 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 Onity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Onity.
Diversification Opportunities for Sonida Senior and Onity
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sonida and Onity is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Onity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onity 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 Onity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onity Group has no effect on the direction of Sonida Senior i.e., Sonida Senior and Onity go up and down completely randomly.
Pair Corralation between Sonida Senior and Onity
Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the Onity. In addition to that, Sonida Senior is 2.6 times more volatile than Onity Group. It trades about 0.0 of its total potential returns per unit of risk. Onity Group is currently generating about 0.25 per unit of volatility. If you would invest 3,013 in Onity Group on September 5, 2024 and sell it today you would earn a total of 199.00 from holding Onity Group or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Onity Group
Performance |
| Timeline |
| Sonida Senior Living |
| Onity Group |
Sonida Senior and Onity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Onity
The main advantage of trading using opposite Sonida Senior and Onity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Onity 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 Onity will offset losses from the drop in Onity'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 |
| Onity vs. Sonida Senior Living | Onity vs. Valneva SE ADR | Onity vs. Arrow Electronics | Onity vs. Franklin Credit Management |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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