Correlation Between Sabra Health and PRECISION DRILLING
Can any of the company-specific risk be diversified away by investing in both Sabra Health and PRECISION DRILLING 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 PRECISION DRILLING 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 PRECISION DRILLING P, you can compare the effects of market volatilities on Sabra Health and PRECISION DRILLING 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 PRECISION DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and PRECISION DRILLING.
Diversification Opportunities for Sabra Health and PRECISION DRILLING
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sabra and PRECISION is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and PRECISION DRILLING P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRECISION DRILLING 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 PRECISION DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRECISION DRILLING has no effect on the direction of Sabra Health i.e., Sabra Health and PRECISION DRILLING go up and down completely randomly.
Pair Corralation between Sabra Health and PRECISION DRILLING
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.65 times more return on investment than PRECISION DRILLING. However, Sabra Health Care is 1.54 times less risky than PRECISION DRILLING. It trades about 0.06 of its potential returns per unit of risk. PRECISION DRILLING P is currently generating about 0.0 per unit of risk. If you would invest 1,011 in Sabra Health Care on October 22, 2024 and sell it today you would earn a total of 623.00 from holding Sabra Health Care or generate 61.62% 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. PRECISION DRILLING P
Performance |
| Timeline |
| Sabra Health Care |
| PRECISION DRILLING |
Sabra Health and PRECISION DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and PRECISION DRILLING
The main advantage of trading using opposite Sabra Health and PRECISION DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, PRECISION DRILLING 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 PRECISION DRILLING will offset losses from the drop in PRECISION DRILLING'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 |
| PRECISION DRILLING vs. VIRGIN WINES UK | PRECISION DRILLING vs. Charter Communications | PRECISION DRILLING vs. Rocket Internet SE | PRECISION DRILLING vs. Computershare Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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