Correlation Between Sabra Health and Gold Road
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Gold Road 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 Gold Road 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 Gold Road Resources, you can compare the effects of market volatilities on Sabra Health and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Gold Road.
Diversification Opportunities for Sabra Health and Gold Road
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sabra and Gold is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Sabra Health i.e., Sabra Health and Gold Road go up and down completely randomly.
Pair Corralation between Sabra Health and Gold Road
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.51 times more return on investment than Gold Road. However, Sabra Health Care is 1.96 times less risky than Gold Road. It trades about 0.1 of its potential returns per unit of risk. Gold Road Resources is currently generating about 0.03 per unit of risk. If you would invest 1,197 in Sabra Health Care on September 12, 2024 and sell it today you would earn a total of 480.00 from holding Sabra Health Care or generate 40.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. Gold Road Resources
Performance |
| Timeline |
| Sabra Health Care |
| Gold Road Resources |
Sabra Health and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Gold Road
The main advantage of trading using opposite Sabra Health and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| Sabra Health vs. Welltower | Sabra Health vs. Superior Plus Corp | Sabra Health vs. NMI Holdings | Sabra Health vs. SIVERS SEMICONDUCTORS AB |
| Gold Road vs. Franco Nevada | Gold Road vs. Superior Plus Corp | Gold Road vs. SIVERS SEMICONDUCTORS AB | Gold Road vs. Norsk Hydro ASA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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