Correlation Between Inogen and Sonida Senior

Can any of the company-specific risk be diversified away by investing in both Inogen 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 Inogen and Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inogen Inc and Sonida Senior Living, you can compare the effects of market volatilities on Inogen 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 Inogen with a short position of Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inogen and Sonida Senior.

Diversification Opportunities for Inogen and Sonida Senior

0.22

Correlation Coefficient

Inogen  Sonida Senior

Modest diversification

The 3 months correlation between Inogen and Sonida is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc 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 Inogen 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 Inogen Inc 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 Inogen i.e., Inogen and Sonida Senior go up and down completely randomly.

Pair Corralation between Inogen and Sonida Senior

Given the investment horizon of 90 days Inogen Inc is expected to under-perform the Sonida Senior. In addition to that, Inogen is 1.04 times more volatile than Sonida Senior Living. It trades about -0.1 of its total potential returns per unit of risk. Sonida Senior Living is currently generating about 0.29 per unit of volatility. If you would invest  2,153  in Sonida Senior Living on September 17, 2024 and sell it today you would earn a total of  330.00  from holding Sonida Senior Living or generate 15.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Inogen Inc  vs.  Sonida Senior Living

Inogen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sonida Senior Living

Risk-Adjusted Performance

0 of 100

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inogen and Sonida Senior

The main advantage of trading using opposite Inogen and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inogen 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.

The idea behind Inogen Inc and Sonida Senior Living 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.