Correlation Between PennantPark Floating and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating 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 PennantPark Floating and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Floating Rate and Sabra Healthcare REIT, you can compare the effects of market volatilities on PennantPark Floating 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 PennantPark Floating with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Sabra Healthcare.
Diversification Opportunities for PennantPark Floating and Sabra Healthcare
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Sabra is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate 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 PennantPark Floating 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 PennantPark Floating Rate 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 PennantPark Floating i.e., PennantPark Floating and Sabra Healthcare go up and down completely randomly.
Pair Corralation between PennantPark Floating and Sabra Healthcare
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.78 times more return on investment than Sabra Healthcare. However, PennantPark Floating Rate is 1.28 times less risky than Sabra Healthcare. It trades about 0.05 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 1,120 in PennantPark Floating Rate on November 27, 2024 and sell it today you would earn a total of 13.00 from holding PennantPark Floating Rate or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Sabra Healthcare REIT
Performance |
| Timeline |
| PennantPark Floating Rate |
| Sabra Healthcare REIT |
PennantPark Floating and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Sabra Healthcare
The main advantage of trading using opposite PennantPark Floating and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating 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.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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