Correlation Between Sabra Health and FORMPIPE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Sabra Health and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB, you can compare the effects of market volatilities on Sabra Health and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and FORMPIPE SOFTWARE.
Diversification Opportunities for Sabra Health and FORMPIPE SOFTWARE
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabra and FORMPIPE is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and FORMPIPE SOFTWARE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORMPIPE SOFTWARE has no effect on the direction of Sabra Health i.e., Sabra Health and FORMPIPE SOFTWARE go up and down completely randomly.
Pair Corralation between Sabra Health and FORMPIPE SOFTWARE
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.69 times more return on investment than FORMPIPE SOFTWARE. However, Sabra Health Care is 1.44 times less risky than FORMPIPE SOFTWARE. It trades about 0.17 of its potential returns per unit of risk. FORMPIPE SOFTWARE AB is currently generating about 0.03 per unit of risk. If you would invest 1,246 in Sabra Health Care on September 3, 2024 and sell it today you would earn a total of 535.00 from holding Sabra Health Care or generate 42.94% 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. FORMPIPE SOFTWARE AB
Performance |
| Timeline |
| Sabra Health Care |
| FORMPIPE SOFTWARE |
Sabra Health and FORMPIPE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and FORMPIPE SOFTWARE
The main advantage of trading using opposite Sabra Health and FORMPIPE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE will offset losses from the drop in FORMPIPE SOFTWARE's long position.| Sabra Health vs. THAI BEVERAGE | Sabra Health vs. Lifeway Foods | Sabra Health vs. Cal Maine Foods | Sabra Health vs. SENECA FOODS A |
| FORMPIPE SOFTWARE vs. Computer And Technologies | FORMPIPE SOFTWARE vs. Ribbon Communications | FORMPIPE SOFTWARE vs. United Utilities Group | FORMPIPE SOFTWARE vs. COMBA TELECOM SYST |
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 Stocks Directory module to find actively traded stocks across global markets.
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