Correlation Between Nutanix and Sienna Senior

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

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

Diversification Opportunities for Nutanix and Sienna Senior

-0.39

Correlation Coefficient

Nutanix  Sienna Senior

Very good diversification

The 3 months correlation between Nutanix and Sienna is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and Sienna Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna Senior Living and Nutanix 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 Nutanix are associated (or correlated) with Sienna Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Senior Living has no effect on the direction of Nutanix i.e., Nutanix and Sienna Senior go up and down completely randomly.

Pair Corralation between Nutanix and Sienna Senior

Given the investment horizon of 90 days Nutanix is expected to generate 2.05 times more return on investment than Sienna Senior. However, Nutanix is 2.05 times more volatile than Sienna Senior Living. It trades about 0.06 of its potential returns per unit of risk. Sienna Senior Living is currently generating about -0.15 per unit of risk. If you would invest  6,064  in Nutanix on September 24, 2024 and sell it today you would earn a total of  443.00  from holding Nutanix or generate 7.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.31%
Values	Daily Returns

Nutanix  vs.  Sienna Senior Living

Nutanix

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nutanix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sienna Senior Living

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sienna Senior Living has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nutanix and Sienna Senior

The main advantage of trading using opposite Nutanix and Sienna Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nutanix position performs unexpectedly, Sienna 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 Sienna Senior will offset losses from the drop in Sienna Senior's long position.

The idea behind Nutanix and Sienna 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.