Correlation Between Sabra Health and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on Sabra Health and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Jacquet Metal.
Diversification Opportunities for Sabra Health and Jacquet Metal
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabra and Jacquet is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Sabra Health i.e., Sabra Health and Jacquet Metal go up and down completely randomly.
Pair Corralation between Sabra Health and Jacquet Metal
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.93 times more return on investment than Jacquet Metal. However, Sabra Health Care is 1.08 times less risky than Jacquet Metal. It trades about 0.17 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.04 per unit of risk. If you would invest 1,288 in Sabra Health Care on September 1, 2024 and sell it today you would earn a total of 493.00 from holding Sabra Health Care or generate 38.28% 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. Jacquet Metal Service
Performance |
| Timeline |
| Sabra Health Care |
| Jacquet Metal Service |
Sabra Health and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Jacquet Metal
The main advantage of trading using opposite Sabra Health and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal'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 |
| Jacquet Metal vs. BORR DRILLING NEW | Jacquet Metal vs. Carsales | Jacquet Metal vs. Gruppo Mutuionline SpA | Jacquet Metal vs. GungHo Online Entertainment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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