Correlation Between KONE Oyj and Sabra Health
Can any of the company-specific risk be diversified away by investing in both KONE Oyj 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 KONE Oyj and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KONE Oyj and Sabra Health Care, you can compare the effects of market volatilities on KONE Oyj 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 KONE Oyj with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of KONE Oyj and Sabra Health.
Diversification Opportunities for KONE Oyj and Sabra Health
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between KONE and Sabra is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding KONE Oyj 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 KONE Oyj 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 KONE Oyj 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 KONE Oyj i.e., KONE Oyj and Sabra Health go up and down completely randomly.
Pair Corralation between KONE Oyj and Sabra Health
Assuming the 90 days horizon KONE Oyj is expected to generate 4.0 times less return on investment than Sabra Health. But when comparing it to its historical volatility, KONE Oyj is 1.24 times less risky than Sabra Health. It trades about 0.02 of its potential returns per unit of risk. Sabra Health Care is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 982.00 in Sabra Health Care on September 5, 2024 and sell it today you would earn a total of 759.00 from holding Sabra Health Care or generate 77.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KONE Oyj vs. Sabra Health Care
Performance |
| Timeline |
| KONE Oyj |
| Sabra Health Care |
KONE Oyj and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KONE Oyj and Sabra Health
The main advantage of trading using opposite KONE Oyj and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KONE Oyj 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.| KONE Oyj vs. Sabra Health Care | KONE Oyj vs. SHIP HEALTHCARE HLDGINC | KONE Oyj vs. ATRYS HEALTH SA | KONE Oyj vs. PUBLIC STORAGE PRFO |
| Sabra Health vs. Welltower | Sabra Health vs. Medical Properties Trust | Sabra Health vs. National Health Investors |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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