Correlation Between Sonida Senior and Asure Software

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

Diversification Opportunities for Sonida Senior and Asure Software

0.23

Correlation Coefficient

Sonida Senior  Asure Software

Modest diversification

The 3 months correlation between Sonida and Asure is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software 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 Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Sonida Senior i.e., Sonida Senior and Asure Software go up and down completely randomly.

Pair Corralation between Sonida Senior and Asure Software

Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the Asure Software. In addition to that, Sonida Senior is 1.0 times more volatile than Asure Software. It trades about -0.01 of its total potential returns per unit of risk. Asure Software is currently generating about 0.09 per unit of volatility. If you would invest  839.00  in Asure Software on September 3, 2024 and sell it today you would earn a total of  130.00  from holding Asure Software or generate 15.49% return on investment over 90 days.

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

Sonida Senior Living  vs.  Asure Software

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

Asure Software

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sonida Senior and Asure Software

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

The idea behind Sonida Senior Living and Asure Software 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.