Correlation Between Sabra Health and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both Sabra Health and FLOW TRADERS 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 FLOW TRADERS 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 FLOW TRADERS LTD, you can compare the effects of market volatilities on Sabra Health and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and FLOW TRADERS.
Diversification Opportunities for Sabra Health and FLOW TRADERS
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sabra and FLOW is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of Sabra Health i.e., Sabra Health and FLOW TRADERS go up and down completely randomly.
Pair Corralation between Sabra Health and FLOW TRADERS
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.86 times more return on investment than FLOW TRADERS. However, Sabra Health Care is 1.16 times less risky than FLOW TRADERS. It trades about 0.07 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.02 per unit of risk. If you would invest 975.00 in Sabra Health Care on September 24, 2024 and sell it today you would earn a total of 615.00 from holding Sabra Health Care or generate 63.08% 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. FLOW TRADERS LTD
Performance |
| Timeline |
| Sabra Health Care |
| FLOW TRADERS LTD |
Sabra Health and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and FLOW TRADERS
The main advantage of trading using opposite Sabra Health and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| Sabra Health vs. SLR Investment Corp | Sabra Health vs. DIVERSIFIED ROYALTY | Sabra Health vs. Virtus Investment Partners | Sabra Health vs. STORE ELECTRONIC |
| FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. The Charles Schwab | FLOW TRADERS vs. The Goldman Sachs |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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