Correlation Between Kinsale Capital and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital 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 Kinsale Capital and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsale Capital Group and Sabra Healthcare REIT, you can compare the effects of market volatilities on Kinsale Capital 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 Kinsale Capital with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Sabra Healthcare.
Diversification Opportunities for Kinsale Capital and Sabra Healthcare
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinsale and Sabra is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group 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 Kinsale Capital 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 Kinsale Capital Group 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 Kinsale Capital i.e., Kinsale Capital and Sabra Healthcare go up and down completely randomly.
Pair Corralation between Kinsale Capital and Sabra Healthcare
Given the investment horizon of 90 days Kinsale Capital Group is expected to generate 1.65 times more return on investment than Sabra Healthcare. However, Kinsale Capital is 1.65 times more volatile than Sabra Healthcare REIT. It trades about -0.06 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about -0.23 per unit of risk. If you would invest 44,428 in Kinsale Capital Group on November 27, 2024 and sell it today you would lose (1,712) from holding Kinsale Capital Group or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinsale Capital Group vs. Sabra Healthcare REIT
Performance |
| Timeline |
| Kinsale Capital Group |
| Sabra Healthcare REIT |
Kinsale Capital and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Sabra Healthcare
The main advantage of trading using opposite Kinsale Capital and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital 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.| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
| Sabra Healthcare vs. Healthcare Realty Trust | Sabra Healthcare vs. Healthpeak Properties | Sabra Healthcare vs. Community Healthcare Trust | Sabra Healthcare vs. Universal Health Realty |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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