Correlation Between Sonida Senior and Regional Health
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Regional Health 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 Regional Health 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 Regional Health Properties, you can compare the effects of market volatilities on Sonida Senior and Regional Health 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 Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Regional Health.
Diversification Opportunities for Sonida Senior and Regional Health
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sonida and Regional is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop 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 Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of Sonida Senior i.e., Sonida Senior and Regional Health go up and down completely randomly.
Pair Corralation between Sonida Senior and Regional Health
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.1 times more return on investment than Regional Health. However, Sonida Senior is 1.1 times more volatile than Regional Health Properties. It trades about 0.1 of its potential returns per unit of risk. Regional Health Properties is currently generating about 0.02 per unit of risk. If you would invest 952.00 in Sonida Senior Living on September 4, 2024 and sell it today you would earn a total of 1,610 from holding Sonida Senior Living or generate 169.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Regional Health Properties
Performance |
| Timeline |
| Sonida Senior Living |
| Regional Health Prop |
Sonida Senior and Regional Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Regional Health
The main advantage of trading using opposite Sonida Senior and Regional Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Regional Health 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 Regional Health will offset losses from the drop in Regional Health's long position.| Sonida Senior vs. Baxter International | Sonida Senior vs. West Pharmaceutical Services | Sonida Senior vs. ResMed Inc | Sonida Senior vs. The Cooper Companies, |
| Regional Health vs. Ramsay Health Care | Regional Health vs. Jack Nathan Medical | Regional Health vs. Nova Leap Health | Regional Health vs. Fresenius SE Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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