Correlation Between EVS Broadcast and Sabra Health
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Sabra Health 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 EVS Broadcast and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and Sabra Health Care, you can compare the effects of market volatilities on EVS Broadcast and Sabra Health 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 EVS Broadcast with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Sabra Health.
Diversification Opportunities for EVS Broadcast and Sabra Health
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between EVS and Sabra is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Sabra Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Health Care and EVS Broadcast 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 EVS Broadcast Equipment are associated (or correlated) with Sabra Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Health Care has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Sabra Health go up and down completely randomly.
Pair Corralation between EVS Broadcast and Sabra Health
Assuming the 90 days trading horizon EVS Broadcast is expected to generate 2.85 times less return on investment than Sabra Health. In addition to that, EVS Broadcast is 1.17 times more volatile than Sabra Health Care. It trades about 0.03 of its total potential returns per unit of risk. Sabra Health Care is currently generating about 0.1 per unit of volatility. If you would invest 1,197 in Sabra Health Care on September 12, 2024 and sell it today you would earn a total of 480.00 from holding Sabra Health Care or generate 40.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Sabra Health Care
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Sabra Health Care |
EVS Broadcast and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Sabra Health
The main advantage of trading using opposite EVS Broadcast and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Sabra Health 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 Sabra Health will offset losses from the drop in Sabra Health's long position.| EVS Broadcast vs. FIREWEED METALS P | EVS Broadcast vs. UPDATE SOFTWARE | EVS Broadcast vs. Magic Software Enterprises | EVS Broadcast vs. Check Point Software |
| Sabra Health vs. NORWEGIAN AIR SHUT | Sabra Health vs. Sekisui Chemical Co | Sabra Health vs. Altair Engineering | Sabra Health vs. AIR PRODCHEMICALS |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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