Correlation Between Sabra Health and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Zijin Mining 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 Zijin Mining 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 Zijin Mining Group, you can compare the effects of market volatilities on Sabra Health and Zijin Mining 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 Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Zijin Mining.
Diversification Opportunities for Sabra Health and Zijin Mining
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sabra and Zijin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group 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 Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Sabra Health i.e., Sabra Health and Zijin Mining go up and down completely randomly.
Pair Corralation between Sabra Health and Zijin Mining
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.57 times more return on investment than Zijin Mining. However, Sabra Health Care is 1.74 times less risky than Zijin Mining. It trades about 0.09 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.11 per unit of risk. If you would invest 1,685 in Sabra Health Care on August 24, 2024 and sell it today you would earn a total of 64.00 from holding Sabra Health Care or generate 3.8% 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. Zijin Mining Group
Performance |
| Timeline |
| Sabra Health Care |
| Zijin Mining Group |
Sabra Health and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Zijin Mining
The main advantage of trading using opposite Sabra Health and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Zijin Mining 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.| Sabra Health vs. REINET INVESTMENTS SCA | Sabra Health vs. EAT WELL INVESTMENT | Sabra Health vs. Genco Shipping Trading | Sabra Health vs. ECHO INVESTMENT ZY |
| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. NMI Holdings | Zijin Mining vs. Origin Agritech |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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