Correlation Between Bridgestone and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Bridgestone 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 Bridgestone and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgestone and Sabra Health Care, you can compare the effects of market volatilities on Bridgestone 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 Bridgestone with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgestone and Sabra Health.
Diversification Opportunities for Bridgestone and Sabra Health
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bridgestone and Sabra is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bridgestone 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 Bridgestone 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 Bridgestone 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 Bridgestone i.e., Bridgestone and Sabra Health go up and down completely randomly.
Pair Corralation between Bridgestone and Sabra Health
Assuming the 90 days horizon Bridgestone is expected to generate 0.77 times more return on investment than Sabra Health. However, Bridgestone is 1.3 times less risky than Sabra Health. It trades about 0.11 of its potential returns per unit of risk. Sabra Health Care is currently generating about 0.05 per unit of risk. If you would invest 3,236 in Bridgestone on September 1, 2024 and sell it today you would earn a total of 113.00 from holding Bridgestone or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bridgestone vs. Sabra Health Care
Performance |
| Timeline |
| Bridgestone |
| Sabra Health Care |
Bridgestone and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgestone and Sabra Health
The main advantage of trading using opposite Bridgestone and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgestone 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.| Bridgestone vs. Sabra Health Care | Bridgestone vs. LIFENET INSURANCE CO | Bridgestone vs. Bumrungrad Hospital Public | Bridgestone vs. Cardinal Health |
| Sabra Health vs. Hanison Construction Holdings | Sabra Health vs. UNITED UTILITIES GR | Sabra Health vs. NORTHEAST UTILITIES | Sabra Health vs. Hitachi Construction Machinery |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |