Correlation Between Hanison Construction and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Hanison Construction 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 Hanison Construction and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanison Construction Holdings and Sabra Health Care, you can compare the effects of market volatilities on Hanison Construction 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 Hanison Construction with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanison Construction and Sabra Health.
Diversification Opportunities for Hanison Construction and Sabra Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanison and Sabra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanison Construction Holdings 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 Hanison Construction 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 Hanison Construction Holdings 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 Hanison Construction i.e., Hanison Construction and Sabra Health go up and down completely randomly.
Pair Corralation between Hanison Construction and Sabra Health
Assuming the 90 days trading horizon Hanison Construction is expected to generate 1.12 times less return on investment than Sabra Health. In addition to that, Hanison Construction is 1.39 times more volatile than Sabra Health Care. It trades about 0.05 of its total potential returns per unit of risk. Sabra Health Care is currently generating about 0.08 per unit of volatility. If you would invest 978.00 in Sabra Health Care on September 3, 2024 and sell it today you would earn a total of 803.00 from holding Sabra Health Care or generate 82.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hanison Construction Holdings vs. Sabra Health Care
Performance |
| Timeline |
| Hanison Construction |
| Sabra Health Care |
Hanison Construction and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanison Construction and Sabra Health
The main advantage of trading using opposite Hanison Construction and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanison Construction 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.| Hanison Construction vs. Larsen Toubro Limited | Hanison Construction vs. China Railway Group | Hanison Construction vs. China Communications Construction | Hanison Construction vs. Superior Plus Corp |
| Sabra Health vs. THAI BEVERAGE | Sabra Health vs. Lifeway Foods | Sabra Health vs. Cal Maine Foods | Sabra Health vs. SENECA FOODS A |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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