Correlation Between Sabra Health and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Sabra Health and SHIP 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 Sabra Health and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Sabra Health and SHIP 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 Sabra Health with a short position of SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and SHIP HEALTHCARE.
Diversification Opportunities for Sabra Health and SHIP HEALTHCARE
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabra and SHIP is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Sabra Health i.e., Sabra Health and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between Sabra Health and SHIP HEALTHCARE
Assuming the 90 days horizon Sabra Health Care is expected to generate 1.14 times more return on investment than SHIP HEALTHCARE. However, Sabra Health is 1.14 times more volatile than SHIP HEALTHCARE HLDGINC. It trades about 0.04 of its potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about -0.17 per unit of risk. If you would invest 1,727 in Sabra Health Care on August 25, 2024 and sell it today you would earn a total of 22.00 from holding Sabra Health Care or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| Sabra Health Care |
| SHIP HEALTHCARE HLDGINC |
Sabra Health and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and SHIP HEALTHCARE
The main advantage of trading using opposite Sabra Health and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, SHIP 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.| Sabra Health vs. Welltower | Sabra Health vs. Omega Healthcare Investors | Sabra Health vs. Medical Properties Trust | Sabra Health vs. National Health Investors |
| SHIP HEALTHCARE vs. Tianjin Capital Environmental | SHIP HEALTHCARE vs. WisdomTree Investments | SHIP HEALTHCARE vs. ECHO INVESTMENT ZY | SHIP HEALTHCARE vs. Virtus Investment Partners |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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