Correlation Between Sonida Senior and JPMorgan BetaBuilders

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

Diversification Opportunities for Sonida Senior and JPMorgan BetaBuilders

-0.27

Correlation Coefficient

Sonida Senior  JPMorgan BetaBuilders

Very good diversification

The 3 months correlation between Sonida and JPMorgan is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sonida Senior Living and JPMorgan BetaBuilders Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan BetaBuilders Mid 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 JPMorgan BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan BetaBuilders Mid has no effect on the direction of Sonida Senior i.e., Sonida Senior and JPMorgan BetaBuilders go up and down completely randomly.

Pair Corralation between Sonida Senior and JPMorgan BetaBuilders

Given the investment horizon of 90 days Sonida Senior Living is expected to under-perform the JPMorgan BetaBuilders. In addition to that, Sonida Senior is 3.34 times more volatile than JPMorgan BetaBuilders Mid. It trades about -0.03 of its total potential returns per unit of risk. JPMorgan BetaBuilders Mid is currently generating about 0.19 per unit of volatility. If you would invest  9,140  in JPMorgan BetaBuilders Mid on September 13, 2024 and sell it today you would earn a total of  1,035  from holding JPMorgan BetaBuilders Mid or generate 11.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sonida Senior Living  vs.  JPMorgan BetaBuilders Mid

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.

JPMorgan BetaBuilders Mid

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan BetaBuilders Mid are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, JPMorgan BetaBuilders may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sonida Senior and JPMorgan BetaBuilders

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

The idea behind Sonida Senior Living and JPMorgan BetaBuilders Mid 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.