Correlation Between Medical Properties and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both Medical Properties 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 Medical Properties and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Properties Trust and Sabra Healthcare REIT, you can compare the effects of market volatilities on Medical Properties 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 Medical Properties with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Sabra Healthcare.
Diversification Opportunities for Medical Properties and Sabra Healthcare
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Medical and Sabra is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust 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 Medical Properties 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 Medical Properties Trust 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 Medical Properties i.e., Medical Properties and Sabra Healthcare go up and down completely randomly.
Pair Corralation between Medical Properties and Sabra Healthcare
Considering the 90-day investment horizon Medical Properties Trust is expected to under-perform the Sabra Healthcare. In addition to that, Medical Properties is 1.61 times more volatile than Sabra Healthcare REIT. It trades about -0.04 of its total potential returns per unit of risk. Sabra Healthcare REIT is currently generating about -0.02 per unit of volatility. If you would invest 1,876 in Sabra Healthcare REIT on August 27, 2024 and sell it today you would lose (24.00) from holding Sabra Healthcare REIT or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Sabra Healthcare REIT
Performance |
| Timeline |
| Medical Properties Trust |
| Sabra Healthcare REIT |
Medical Properties and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Sabra Healthcare
The main advantage of trading using opposite Medical Properties and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties 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.| Medical Properties vs. Sabra Healthcare REIT | Medical Properties vs. LTC Properties | Medical Properties vs. Healthpeak Properties | Medical Properties vs. National Health Investors |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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