Correlation Between Airports and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Airports 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 Airports and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airports of Thailand and Sabra Health Care, you can compare the effects of market volatilities on Airports 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 Airports with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Sabra Health.
Diversification Opportunities for Airports and Sabra Health
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Airports and Sabra is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand 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 Airports 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 Airports of Thailand 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 Airports i.e., Airports and Sabra Health go up and down completely randomly.
Pair Corralation between Airports and Sabra Health
Assuming the 90 days trading horizon Airports is expected to generate 7.16 times less return on investment than Sabra Health. But when comparing it to its historical volatility, Airports of Thailand is 1.12 times less risky than Sabra Health. It trades about 0.03 of its potential returns per unit of risk. Sabra Health Care is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,672 in Sabra Health Care on September 4, 2024 and sell it today you would earn a total of 100.00 from holding Sabra Health Care or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Sabra Health Care
Performance |
| Timeline |
| Airports of Thailand |
| Sabra Health Care |
Airports and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Sabra Health
The main advantage of trading using opposite Airports and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports 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.| Airports vs. MAVEN WIRELESS SWEDEN | Airports vs. FEMALE HEALTH | Airports vs. OFFICE DEPOT | Airports vs. SHIP HEALTHCARE HLDGINC |
| Sabra Health vs. Welltower | Sabra Health vs. Omega Healthcare Investors | 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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