Correlation Between APPLIED MATERIALS and Sabra Health
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS 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 APPLIED MATERIALS and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and Sabra Health Care, you can compare the effects of market volatilities on APPLIED MATERIALS 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 APPLIED MATERIALS with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and Sabra Health.
Diversification Opportunities for APPLIED MATERIALS and Sabra Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between APPLIED and Sabra is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS i.e., APPLIED MATERIALS and Sabra Health go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and Sabra Health
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to under-perform the Sabra Health. In addition to that, APPLIED MATERIALS is 1.33 times more volatile than Sabra Health Care. It trades about -0.09 of its total potential returns per unit of risk. Sabra Health Care is currently generating about 0.06 per unit of volatility. If you would invest 1,723 in Sabra Health Care on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Sabra Health Care or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APPLIED MATERIALS vs. Sabra Health Care
Performance |
| Timeline |
| APPLIED MATERIALS |
| Sabra Health Care |
APPLIED MATERIALS and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and Sabra Health
The main advantage of trading using opposite APPLIED MATERIALS and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS 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.| APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Microsoft | APPLIED MATERIALS vs. Microsoft |
| Sabra Health vs. CENTURIA OFFICE REIT | Sabra Health vs. Infrastrutture Wireless Italiane | Sabra Health vs. TITANIUM TRANSPORTGROUP | Sabra Health vs. KAUFMAN ET BROAD |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |