Correlation Between Sonida Senior and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Sonida Senior and Olympic Steel 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 Olympic Steel 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 Olympic Steel, you can compare the effects of market volatilities on Sonida Senior and Olympic Steel 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 Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonida Senior and Olympic Steel.
Diversification Opportunities for Sonida Senior and Olympic Steel
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonida and Olympic is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel 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 Olympic Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Steel has no effect on the direction of Sonida Senior i.e., Sonida Senior and Olympic Steel go up and down completely randomly.
Pair Corralation between Sonida Senior and Olympic Steel
Given the investment horizon of 90 days Sonida Senior Living is expected to generate 1.44 times more return on investment than Olympic Steel. However, Sonida Senior is 1.44 times more volatile than Olympic Steel. It trades about -0.02 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.04 per unit of risk. If you would invest 3,239 in Sonida Senior Living on September 3, 2024 and sell it today you would lose (633.00) from holding Sonida Senior Living or give up 19.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonida Senior Living vs. Olympic Steel
Performance |
| Timeline |
| Sonida Senior Living |
| Olympic Steel |
Sonida Senior and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonida Senior and Olympic Steel
The main advantage of trading using opposite Sonida Senior and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonida Senior position performs unexpectedly, Olympic Steel 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 Olympic Steel will offset losses from the drop in Olympic Steel'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 |
| Olympic Steel vs. Universal Stainless Alloy | Olympic Steel vs. Outokumpu Oyj ADR | Olympic Steel vs. Usinas Siderurgicas de | Olympic Steel vs. POSCO Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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