Correlation Between RBC Bearings and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both RBC Bearings 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 RBC Bearings and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Bearings Incorporated and Sabra Healthcare REIT, you can compare the effects of market volatilities on RBC Bearings 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 RBC Bearings with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Sabra Healthcare.
Diversification Opportunities for RBC Bearings and Sabra Healthcare
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RBC and Sabra is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated 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 RBC Bearings 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 RBC Bearings Incorporated 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 RBC Bearings i.e., RBC Bearings and Sabra Healthcare go up and down completely randomly.
Pair Corralation between RBC Bearings and Sabra Healthcare
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 1.08 times more return on investment than Sabra Healthcare. However, RBC Bearings is 1.08 times more volatile than Sabra Healthcare REIT. It trades about 0.13 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.13 per unit of risk. If you would invest 29,785 in RBC Bearings Incorporated on August 30, 2024 and sell it today you would earn a total of 4,181 from holding RBC Bearings Incorporated or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Sabra Healthcare REIT
Performance |
| Timeline |
| RBC Bearings |
| Sabra Healthcare REIT |
RBC Bearings and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Sabra Healthcare
The main advantage of trading using opposite RBC Bearings and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings 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.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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