Correlation Between WEBTOON Entertainment and Sonida Senior

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

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

Diversification Opportunities for WEBTOON Entertainment and Sonida Senior

0.03

Correlation Coefficient

WEBTOON Entertainment  Sonida Senior

Significant diversification

The 3 months correlation between WEBTOON and Sonida is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common 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 WEBTOON Entertainment 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 WEBTOON Entertainment Common 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 WEBTOON Entertainment i.e., WEBTOON Entertainment and Sonida Senior go up and down completely randomly.

Pair Corralation between WEBTOON Entertainment and Sonida Senior

Given the investment horizon of 90 days WEBTOON Entertainment Common is expected to under-perform the Sonida Senior. In addition to that, WEBTOON Entertainment is 1.16 times more volatile than Sonida Senior Living. It trades about -0.06 of its total potential returns per unit of risk. Sonida Senior Living is currently generating about 0.06 per unit of volatility. If you would invest  1,167  in Sonida Senior Living on September 14, 2024 and sell it today you would earn a total of  1,316  from holding Sonida Senior Living or generate 112.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	24.09%
Values	Daily Returns

WEBTOON Entertainment Common  vs.  Sonida Senior Living

WEBTOON Entertainment

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WEBTOON Entertainment Common are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, WEBTOON Entertainment displayed solid returns over the last few months and may actually be approaching a breakup point.

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 WEBTOON Entertainment and Sonida Senior

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

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.