Correlation Between Sonida Senior and Select Medical
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Select Medical 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 Select Medical 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 Select Medical Holdings, you can compare the effects of market volatilities on Sonida Senior and Select Medical 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 Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Select Medical.
Diversification Opportunities for Sonida Senior and Select Medical
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Select is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Select Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Medical Holdings 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 Select Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Medical Holdings has no effect on the direction of Sonida Senior i.e., Sonida Senior and Select Medical go up and down completely randomly.
Pair Corralation between Sonida Senior and Select Medical
Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the Select Medical. In addition to that, Sonida Senior is 1.02 times more volatile than Select Medical Holdings. It trades about -0.09 of its total potential returns per unit of risk. Select Medical Holdings is currently generating about 0.33 per unit of volatility. If you would invest 3,206 in Select Medical Holdings on August 27, 2024 and sell it today you would earn a total of 761.00 from holding Select Medical Holdings or generate 23.74% 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. Select Medical Holdings
Performance |
| Timeline |
| Sonida Senior Living |
| Select Medical Holdings |
Sonida Senior and Select Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Select Medical
The main advantage of trading using opposite Sonida Senior and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Select Medical 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 Select Medical will offset losses from the drop in Select Medical's long position.| Sonida Senior vs. Heartbeam | Sonida Senior vs. EUDA Health Holdings | Sonida Senior vs. Nutex Health | Sonida Senior vs. Healthcare Triangle |
| Select Medical vs. The Ensign Group | Select Medical vs. Encompass Health Corp | Select Medical vs. InnovAge Holding Corp | Select Medical vs. Enhabit |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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