Correlation Between Sabra Health and International Game
Can any of the company-specific risk be diversified away by investing in both Sabra Health and International Game 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 International Game 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 International Game Technology, you can compare the effects of market volatilities on Sabra Health and International Game 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 International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and International Game.
Diversification Opportunities for Sabra Health and International Game
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabra and International is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of Sabra Health i.e., Sabra Health and International Game go up and down completely randomly.
Pair Corralation between Sabra Health and International Game
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.77 times more return on investment than International Game. However, Sabra Health Care is 1.29 times less risky than International Game. It trades about 0.08 of its potential returns per unit of risk. International Game Technology is currently generating about 0.0 per unit of risk. If you would invest 975.00 in Sabra Health Care on September 1, 2024 and sell it today you would earn a total of 813.00 from holding Sabra Health Care or generate 83.38% 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. International Game Technology
Performance |
| Timeline |
| Sabra Health Care |
| International Game |
Sabra Health and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and International Game
The main advantage of trading using opposite Sabra Health and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game'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 |
| International Game vs. Nishi Nippon Railroad Co | International Game vs. Transport International Holdings | International Game vs. HEALTHCARE REAL A | International Game vs. Texas Roadhouse |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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