Correlation Between Sabra Health and AXWAY SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Sabra Health and AXWAY SOFTWARE 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 Sabra Health and AXWAY SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabra Health Care and AXWAY SOFTWARE EO, you can compare the effects of market volatilities on Sabra Health and AXWAY SOFTWARE 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 Sabra Health with a short position of AXWAY SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and AXWAY SOFTWARE.
Diversification Opportunities for Sabra Health and AXWAY SOFTWARE
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sabra and AXWAY is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and AXWAY SOFTWARE EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXWAY SOFTWARE EO and Sabra Health 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 Sabra Health Care are associated (or correlated) with AXWAY SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXWAY SOFTWARE EO has no effect on the direction of Sabra Health i.e., Sabra Health and AXWAY SOFTWARE go up and down completely randomly.
Pair Corralation between Sabra Health and AXWAY SOFTWARE
Assuming the 90 days horizon Sabra Health Care is expected to generate 2.47 times more return on investment than AXWAY SOFTWARE. However, Sabra Health is 2.47 times more volatile than AXWAY SOFTWARE EO. It trades about 0.05 of its potential returns per unit of risk. AXWAY SOFTWARE EO is currently generating about -0.06 per unit of risk. If you would invest 1,758 in Sabra Health Care on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Sabra Health Care or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. AXWAY SOFTWARE EO
Performance |
| Timeline |
| Sabra Health Care |
| AXWAY SOFTWARE EO |
Sabra Health and AXWAY SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and AXWAY SOFTWARE
The main advantage of trading using opposite Sabra Health and AXWAY SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, AXWAY SOFTWARE 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 AXWAY SOFTWARE will offset losses from the drop in AXWAY SOFTWARE's long position.| Sabra Health vs. Hanison Construction Holdings | Sabra Health vs. UNITED UTILITIES GR | Sabra Health vs. NORTHEAST UTILITIES | Sabra Health vs. Hitachi Construction Machinery |
| AXWAY SOFTWARE vs. The Hanover Insurance | AXWAY SOFTWARE vs. Regions Financial | AXWAY SOFTWARE vs. NEWELL RUBBERMAID | AXWAY SOFTWARE vs. OAKTRSPECLENDNEW |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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