Correlation Between Sabra Health and Public Storage
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Sabra Health and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Public Storage.
Diversification Opportunities for Sabra Health and Public Storage
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabra and Public is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Sabra Health i.e., Sabra Health and Public Storage go up and down completely randomly.
Pair Corralation between Sabra Health and Public Storage
Assuming the 90 days horizon Sabra Health Care is expected to generate 1.07 times more return on investment than Public Storage. However, Sabra Health is 1.07 times more volatile than Public Storage. It trades about 0.17 of its potential returns per unit of risk. Public Storage is currently generating about 0.16 per unit of risk. If you would invest 1,246 in Sabra Health Care on September 3, 2024 and sell it today you would earn a total of 535.00 from holding Sabra Health Care or generate 42.94% 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. Public Storage
Performance |
| Timeline |
| Sabra Health Care |
| Public Storage |
Sabra Health and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Public Storage
The main advantage of trading using opposite Sabra Health and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Sabra Health vs. THAI BEVERAGE | Sabra Health vs. Lifeway Foods | Sabra Health vs. Cal Maine Foods | Sabra Health vs. SENECA FOODS A |
| Public Storage vs. SBA Communications Corp | Public Storage vs. INTERSHOP Communications Aktiengesellschaft | Public Storage vs. Cass Information Systems | Public Storage vs. Citic Telecom International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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