Correlation Between Sabra Health and Continental
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Continental 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 Continental 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 Camden Property Trust, you can compare the effects of market volatilities on Sabra Health and Continental 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 Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Continental.
Diversification Opportunities for Sabra Health and Continental
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sabra and Continental is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Camden Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camden Property Trust 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 Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camden Property Trust has no effect on the direction of Sabra Health i.e., Sabra Health and Continental go up and down completely randomly.
Pair Corralation between Sabra Health and Continental
Assuming the 90 days horizon Sabra Health Care is expected to under-perform the Continental. In addition to that, Sabra Health is 1.19 times more volatile than Camden Property Trust. It trades about -0.38 of its total potential returns per unit of risk. Camden Property Trust is currently generating about -0.27 per unit of volatility. If you would invest 11,692 in Camden Property Trust on September 24, 2024 and sell it today you would lose (692.00) from holding Camden Property Trust or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. Camden Property Trust
Performance |
| Timeline |
| Sabra Health Care |
| Camden Property Trust |
Sabra Health and Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Continental
The main advantage of trading using opposite Sabra Health and Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Continental 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 Continental will offset losses from the drop in Continental's long position.| Sabra Health vs. SLR Investment Corp | Sabra Health vs. DIVERSIFIED ROYALTY | Sabra Health vs. Virtus Investment Partners | Sabra Health vs. STORE ELECTRONIC |
| Continental vs. DATAGROUP SE | Continental vs. Sabra Health Care | Continental vs. Cardinal Health | Continental vs. Automatic Data Processing |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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