Correlation Between Tsakos Energy and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both Tsakos Energy and Sonida Senior 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 Tsakos Energy and Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsakos Energy Navigation and Sonida Senior Living, you can compare the effects of market volatilities on Tsakos Energy and Sonida Senior 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 Tsakos Energy with a short position of Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsakos Energy and Sonida Senior.
Diversification Opportunities for Tsakos Energy and Sonida Senior
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tsakos and Sonida is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tsakos Energy Navigation and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living and Tsakos Energy 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 Tsakos Energy Navigation are associated (or correlated) with Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of Tsakos Energy i.e., Tsakos Energy and Sonida Senior go up and down completely randomly.
Pair Corralation between Tsakos Energy and Sonida Senior
Considering the 90-day investment horizon Tsakos Energy is expected to generate 7.4 times less return on investment than Sonida Senior. But when comparing it to its historical volatility, Tsakos Energy Navigation is 2.23 times less risky than Sonida Senior. It trades about 0.02 of its potential returns per unit of risk. Sonida Senior Living is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 951.00 in Sonida Senior Living on August 31, 2024 and sell it today you would earn a total of 1,655 from holding Sonida Senior Living or generate 174.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Tsakos Energy Navigation vs. Sonida Senior Living
Performance |
| Timeline |
| Tsakos Energy Navigation |
| Sonida Senior Living |
Tsakos Energy and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsakos Energy and Sonida Senior
The main advantage of trading using opposite Tsakos Energy and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsakos Energy position performs unexpectedly, Sonida Senior 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 Sonida Senior will offset losses from the drop in Sonida Senior's long position.| Tsakos Energy vs. Allient | Tsakos Energy vs. Valneva SE ADR | Tsakos Energy vs. Paysafe | Tsakos Energy vs. Senmiao Technology |
| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. InnovAge Holding Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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