Correlation Between Sabra Health and Nippon Telegraph
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Nippon Telegraph 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 Nippon Telegraph 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 Nippon Telegraph and, you can compare the effects of market volatilities on Sabra Health and Nippon Telegraph 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 Nippon Telegraph. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Nippon Telegraph.
Diversification Opportunities for Sabra Health and Nippon Telegraph
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabra and Nippon is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Nippon Telegraph and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Telegraph 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 Nippon Telegraph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Telegraph has no effect on the direction of Sabra Health i.e., Sabra Health and Nippon Telegraph go up and down completely randomly.
Pair Corralation between Sabra Health and Nippon Telegraph
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.96 times more return on investment than Nippon Telegraph. However, Sabra Health Care is 1.04 times less risky than Nippon Telegraph. It trades about 0.1 of its potential returns per unit of risk. Nippon Telegraph and is currently generating about -0.04 per unit of risk. If you would invest 1,204 in Sabra Health Care on October 22, 2024 and sell it today you would earn a total of 430.00 from holding Sabra Health Care or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. Nippon Telegraph and
Performance |
| Timeline |
| Sabra Health Care |
| Nippon Telegraph |
Sabra Health and Nippon Telegraph Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Nippon Telegraph
The main advantage of trading using opposite Sabra Health and Nippon Telegraph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Nippon Telegraph 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 Nippon Telegraph will offset losses from the drop in Nippon Telegraph's long position.| Sabra Health vs. GREENX METALS LTD | Sabra Health vs. Plastic Omnium | Sabra Health vs. NEWELL RUBBERMAID | Sabra Health vs. Perseus Mining Limited |
| Nippon Telegraph vs. MagnaChip Semiconductor Corp | Nippon Telegraph vs. ARDAGH METAL PACDL 0001 | Nippon Telegraph vs. SERI INDUSTRIAL EO | Nippon Telegraph vs. De Grey Mining |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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