Correlation Between Sabra Health and Tokio Marine
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Tokio Marine 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 Tokio Marine 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 Tokio Marine Holdings, you can compare the effects of market volatilities on Sabra Health and Tokio Marine 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 Tokio Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Tokio Marine.
Diversification Opportunities for Sabra Health and Tokio Marine
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabra and Tokio is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Tokio Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokio Marine Holdings 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 Tokio Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokio Marine Holdings has no effect on the direction of Sabra Health i.e., Sabra Health and Tokio Marine go up and down completely randomly.
Pair Corralation between Sabra Health and Tokio Marine
Assuming the 90 days horizon Sabra Health is expected to generate 1.1 times less return on investment than Tokio Marine. But when comparing it to its historical volatility, Sabra Health Care is 1.31 times less risky than Tokio Marine. It trades about 0.06 of its potential returns per unit of risk. Tokio Marine Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,980 in Tokio Marine Holdings on November 27, 2024 and sell it today you would earn a total of 1,211 from holding Tokio Marine Holdings or generate 61.16% 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. Tokio Marine Holdings
Performance |
| Timeline |
| Sabra Health Care |
| Tokio Marine Holdings |
Sabra Health and Tokio Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Tokio Marine
The main advantage of trading using opposite Sabra Health and Tokio Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Tokio Marine 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 Tokio Marine will offset losses from the drop in Tokio Marine's long position.| Sabra Health vs. AGF Management Limited | Sabra Health vs. Waste Management | Sabra Health vs. Cleanaway Waste Management | Sabra Health vs. CEOTRONICS |
| Tokio Marine vs. Yuexiu Transport Infrastructure | Tokio Marine vs. Kaufman Broad SA | Tokio Marine vs. DENTSPLY SIRONA | Tokio Marine vs. Mount Gibson Iron |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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