Correlation Between Griffon and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both Griffon and Sabra Healthcare 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 Griffon and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Sabra Healthcare REIT, you can compare the effects of market volatilities on Griffon and Sabra Healthcare 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 Griffon with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Sabra Healthcare.
Diversification Opportunities for Griffon and Sabra Healthcare
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Griffon and Sabra is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Sabra Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Healthcare REIT and Griffon 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 Griffon are associated (or correlated) with Sabra Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Healthcare REIT has no effect on the direction of Griffon i.e., Griffon and Sabra Healthcare go up and down completely randomly.
Pair Corralation between Griffon and Sabra Healthcare
Considering the 90-day investment horizon Griffon is expected to generate 1.75 times more return on investment than Sabra Healthcare. However, Griffon is 1.75 times more volatile than Sabra Healthcare REIT. It trades about 0.12 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.12 per unit of risk. If you would invest 3,007 in Griffon on August 31, 2024 and sell it today you would earn a total of 5,344 from holding Griffon or generate 177.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Sabra Healthcare REIT
Performance |
| Timeline |
| Griffon |
| Sabra Healthcare REIT |
Griffon and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Sabra Healthcare
The main advantage of trading using opposite Griffon and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Sabra Healthcare 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 Healthcare will offset losses from the drop in Sabra Healthcare's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Sabra Healthcare vs. LTC Properties | Sabra Healthcare vs. Healthpeak Properties | Sabra Healthcare vs. Omega Healthcare Investors | Sabra Healthcare vs. Ventas Inc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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