Correlation Between GOLD ROAD and Sabra Health
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD 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 GOLD ROAD and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and Sabra Health Care, you can compare the effects of market volatilities on GOLD ROAD 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 GOLD ROAD with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Sabra Health.
Diversification Opportunities for GOLD ROAD and Sabra Health
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GOLD and Sabra is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES 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 GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and Sabra Health go up and down completely randomly.
Pair Corralation between GOLD ROAD and Sabra Health
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.32 times more return on investment than Sabra Health. However, GOLD ROAD is 1.32 times more volatile than Sabra Health Care. It trades about 0.06 of its potential returns per unit of risk. Sabra Health Care is currently generating about -0.1 per unit of risk. If you would invest 124.00 in GOLD ROAD RES on October 9, 2024 and sell it today you would earn a total of 2.00 from holding GOLD ROAD RES or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. Sabra Health Care
Performance |
| Timeline |
| GOLD ROAD RES |
| Sabra Health Care |
GOLD ROAD and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and Sabra Health
The main advantage of trading using opposite GOLD ROAD and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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.The idea behind GOLD ROAD RES and Sabra Health Care 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.| Sabra Health vs. PLAY2CHILL SA ZY | Sabra Health vs. The Boston Beer | Sabra Health vs. MOLSON RS BEVERAGE | Sabra Health vs. Playa Hotels Resorts |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |