Correlation Between Sabra Health and HNI
Can any of the company-specific risk be diversified away by investing in both Sabra Health and HNI 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 HNI 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 HNI Corporation, you can compare the effects of market volatilities on Sabra Health and HNI 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 HNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and HNI.
Diversification Opportunities for Sabra Health and HNI
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sabra and HNI is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and HNI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corporation 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 HNI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corporation has no effect on the direction of Sabra Health i.e., Sabra Health and HNI go up and down completely randomly.
Pair Corralation between Sabra Health and HNI
Assuming the 90 days horizon Sabra Health is expected to generate 8.09 times less return on investment than HNI. But when comparing it to its historical volatility, Sabra Health Care is 1.01 times less risky than HNI. It trades about 0.04 of its potential returns per unit of risk. HNI Corporation is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,590 in HNI Corporation on August 31, 2024 and sell it today you would earn a total of 610.00 from holding HNI Corporation or generate 13.29% 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. HNI Corp.
Performance |
| Timeline |
| Sabra Health Care |
| HNI Corporation |
Sabra Health and HNI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and HNI
The main advantage of trading using opposite Sabra Health and HNI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, HNI 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 HNI will offset losses from the drop in HNI's long position.| Sabra Health vs. Medical Properties Trust | Sabra Health vs. LTC Properties | Sabra Health vs. The GEO Group |
| HNI vs. Sabra Health Care | HNI vs. FEMALE HEALTH | HNI vs. Nucletron Electronic Aktiengesellschaft | HNI vs. YOOMA WELLNESS INC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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