Correlation Between Sonida Senior and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Parker Hannifin 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 Parker Hannifin 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 Parker Hannifin, you can compare the effects of market volatilities on Sonida Senior and Parker Hannifin 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 Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Parker Hannifin.
Diversification Opportunities for Sonida Senior and Parker Hannifin
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sonida and Parker is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin 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 Parker Hannifin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parker Hannifin has no effect on the direction of Sonida Senior i.e., Sonida Senior and Parker Hannifin go up and down completely randomly.
Pair Corralation between Sonida Senior and Parker Hannifin
Given the investment horizon of 90 days Sonida Senior is expected to generate 92.18 times less return on investment than Parker Hannifin. In addition to that, Sonida Senior is 1.49 times more volatile than Parker Hannifin. It trades about 0.0 of its total potential returns per unit of risk. Parker Hannifin is currently generating about 0.24 per unit of volatility. If you would invest 63,257 in Parker Hannifin on September 1, 2024 and sell it today you would earn a total of 7,033 from holding Parker Hannifin or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Parker Hannifin
Performance |
| Timeline |
| Sonida Senior Living |
| Parker Hannifin |
Sonida Senior and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Parker Hannifin
The main advantage of trading using opposite Sonida Senior and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Parker Hannifin 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 Parker Hannifin will offset losses from the drop in Parker Hannifin'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 |
| Parker Hannifin vs. Flowserve | Parker Hannifin vs. Franklin Electric Co | Parker Hannifin vs. Dover | Parker Hannifin vs. Crane Company |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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