Correlation Between Sabra Health and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Hochschild 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 Hochschild 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 Hochschild Mining plc, you can compare the effects of market volatilities on Sabra Health and Hochschild 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 Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Hochschild Mining.
Diversification Opportunities for Sabra Health and Hochschild Mining
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabra and Hochschild is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Hochschild Mining plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochschild Mining plc 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 Hochschild Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochschild Mining plc has no effect on the direction of Sabra Health i.e., Sabra Health and Hochschild Mining go up and down completely randomly.
Pair Corralation between Sabra Health and Hochschild Mining
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.62 times more return on investment than Hochschild Mining. However, Sabra Health Care is 1.61 times less risky than Hochschild Mining. It trades about 0.04 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about -0.03 per unit of risk. If you would invest 1,758 in Sabra Health Care on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Sabra Health Care or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. Hochschild Mining plc
Performance |
| Timeline |
| Sabra Health Care |
| Hochschild Mining plc |
Sabra Health and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Hochschild Mining
The main advantage of trading using opposite Sabra Health and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Hochschild 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 Hochschild Mining will offset losses from the drop in Hochschild Mining'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 |
| Hochschild Mining vs. ZIJIN MINH UNSPADR20 | Hochschild Mining vs. Superior Plus Corp | Hochschild Mining vs. NMI Holdings | Hochschild 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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