Correlation Between Sonida Senior and RadNet
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and RadNet 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 RadNet 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 RadNet Inc, you can compare the effects of market volatilities on Sonida Senior and RadNet 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 RadNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and RadNet.
Diversification Opportunities for Sonida Senior and RadNet
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sonida and RadNet is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and RadNet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RadNet Inc 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 RadNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RadNet Inc has no effect on the direction of Sonida Senior i.e., Sonida Senior and RadNet go up and down completely randomly.
Pair Corralation between Sonida Senior and RadNet
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.85 times more return on investment than RadNet. However, Sonida Senior is 1.85 times more volatile than RadNet Inc. It trades about 0.1 of its potential returns per unit of risk. RadNet Inc is currently generating about 0.13 per unit of risk. If you would invest 802.00 in Sonida Senior Living on August 29, 2024 and sell it today you would earn a total of 1,781 from holding Sonida Senior Living or generate 222.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.68% |
| Values | Daily Returns |
Sonida Senior Living vs. RadNet Inc
Performance |
| Timeline |
| Sonida Senior Living |
| RadNet Inc |
Sonida Senior and RadNet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and RadNet
The main advantage of trading using opposite Sonida Senior and RadNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, RadNet 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 RadNet will offset losses from the drop in RadNet's long position.| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. InnovAge Holding Corp | Sonida Senior vs. Acadia Healthcare |
| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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