Correlation Between Sabra Health and Nib Holdings
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Nib Holdings 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 Nib Holdings 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 nib holdings limited, you can compare the effects of market volatilities on Sabra Health and Nib Holdings 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 Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Nib Holdings.
Diversification Opportunities for Sabra Health and Nib Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabra and Nib is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and nib holdings limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nib holdings limited 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 Nib Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nib holdings limited has no effect on the direction of Sabra Health i.e., Sabra Health and Nib Holdings go up and down completely randomly.
Pair Corralation between Sabra Health and Nib Holdings
Assuming the 90 days horizon Sabra Health Care is expected to generate 1.45 times more return on investment than Nib Holdings. However, Sabra Health is 1.45 times more volatile than nib holdings limited. It trades about 0.09 of its potential returns per unit of risk. nib holdings limited is currently generating about 0.06 per unit of risk. If you would invest 1,610 in Sabra Health Care on October 22, 2024 and sell it today you would earn a total of 42.00 from holding Sabra Health Care or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. nib holdings limited
Performance |
| Timeline |
| Sabra Health Care |
| nib holdings limited |
Sabra Health and Nib Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Nib Holdings
The main advantage of trading using opposite Sabra Health and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Nib Holdings 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 Nib Holdings will offset losses from the drop in Nib Holdings' long position.| Sabra Health vs. GREENX METALS LTD | Sabra Health vs. Plastic Omnium | Sabra Health vs. NEWELL RUBBERMAID | Sabra Health vs. Perseus Mining Limited |
| Nib Holdings vs. Direct Line Insurance | Nib Holdings vs. ELECTRONIC ARTS | Nib Holdings vs. BANK OF CHINA | Nib Holdings vs. Nucletron Electronic Aktiengesellschaft |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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