Correlation Between Mesa Air and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both Mesa Air 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 Mesa Air and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesa Air Group and Sabra Healthcare REIT, you can compare the effects of market volatilities on Mesa Air 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 Mesa Air with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Sabra Healthcare.
Diversification Opportunities for Mesa Air and Sabra Healthcare
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mesa and Sabra is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air 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 Mesa Air 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 Mesa Air 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 Mesa Air i.e., Mesa Air and Sabra Healthcare go up and down completely randomly.
Pair Corralation between Mesa Air and Sabra Healthcare
Given the investment horizon of 90 days Mesa Air Group is expected to generate 2.14 times more return on investment than Sabra Healthcare. However, Mesa Air is 2.14 times more volatile than Sabra Healthcare REIT. It trades about 0.21 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.0 per unit of risk. If you would invest 94.00 in Mesa Air Group on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Mesa Air Group or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Sabra Healthcare REIT
Performance |
| Timeline |
| Mesa Air Group |
| Sabra Healthcare REIT |
Mesa Air and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Sabra Healthcare
The main advantage of trading using opposite Mesa Air and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air 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.| Mesa Air vs. American Airlines Group | Mesa Air vs. Southwest Airlines | Mesa Air vs. JetBlue Airways Corp | Mesa Air vs. Frontier Group Holdings |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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