Correlation Between Superior Plus and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Sabra Health Care, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Sabra Health.
Diversification Opportunities for Superior Plus and Sabra Health
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Sabra is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Sabra Health go up and down completely randomly.
Pair Corralation between Superior Plus and Sabra Health
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Sabra Health. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.19 times less risky than Sabra Health. The stock trades about -0.16 of its potential returns per unit of risk. The Sabra Health Care is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,569 in Sabra Health Care on November 27, 2024 and sell it today you would lose (70.00) from holding Sabra Health Care or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Sabra Health Care
Performance |
| Timeline |
| Superior Plus Corp |
| Sabra Health Care |
Superior Plus and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Sabra Health
The main advantage of trading using opposite Superior Plus and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. SANOK RUBBER ZY | Superior Plus vs. APPLIED MATERIALS | Superior Plus vs. WILLIS LEASE FIN | Superior Plus vs. FUYO GENERAL LEASE |
| Sabra Health vs. AGF Management Limited | Sabra Health vs. Waste Management | Sabra Health vs. Cleanaway Waste Management | Sabra Health vs. CEOTRONICS |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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