Correlation Between Sonida Senior and STATE

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Can any of the company-specific risk be diversified away by investing in both Sonida Senior and STATE 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 STATE 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 STATE STREET P, you can compare the effects of market volatilities on Sonida Senior and STATE 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 STATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and STATE.

Diversification Opportunities for Sonida Senior and STATE

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Sonida and STATE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and STATE STREET P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STATE STREET P 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 STATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STATE STREET P has no effect on the direction of Sonida Senior i.e., Sonida Senior and STATE go up and down completely randomly.

Pair Corralation between Sonida Senior and STATE

If you would invest (100.00) in STATE STREET P on September 6, 2024 and sell it today you would earn a total of  100.00  from holding STATE STREET P or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Sonida Senior Living  vs.  STATE STREET P

 Performance 
       Timeline  
Sonida Senior Living 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Sonida Senior Living has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Sonida Senior is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
STATE STREET P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days STATE STREET P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, STATE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sonida Senior and STATE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sonida Senior and STATE

The main advantage of trading using opposite Sonida Senior and STATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, STATE 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 STATE will offset losses from the drop in STATE's long position.
The idea behind Sonida Senior Living and STATE STREET P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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