Correlation Between Sabra Health and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Sabra Health and NTG Nordic 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 NTG Nordic 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 NTG Nordic Transport, you can compare the effects of market volatilities on Sabra Health and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and NTG Nordic.
Diversification Opportunities for Sabra Health and NTG Nordic
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sabra and NTG is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Sabra Health i.e., Sabra Health and NTG Nordic go up and down completely randomly.
Pair Corralation between Sabra Health and NTG Nordic
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.68 times more return on investment than NTG Nordic. However, Sabra Health Care is 1.47 times less risky than NTG Nordic. It trades about 0.1 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.01 per unit of risk. If you would invest 1,197 in Sabra Health Care on September 12, 2024 and sell it today you would earn a total of 480.00 from holding Sabra Health Care or generate 40.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. NTG Nordic Transport
Performance |
| Timeline |
| Sabra Health Care |
| NTG Nordic Transport |
Sabra Health and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and NTG Nordic
The main advantage of trading using opposite Sabra Health and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| Sabra Health vs. Welltower | Sabra Health vs. Superior Plus Corp | Sabra Health vs. NMI Holdings | Sabra Health vs. SIVERS SEMICONDUCTORS AB |
| NTG Nordic vs. Gold Road Resources | NTG Nordic vs. FORMPIPE SOFTWARE AB | NTG Nordic vs. GOLD ROAD RES | NTG Nordic vs. Broadcom |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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