Correlation Between Sabra Health and Tanaka CoLtd
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Tanaka CoLtd 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 Tanaka CoLtd 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 Tanaka CoLtd, you can compare the effects of market volatilities on Sabra Health and Tanaka CoLtd 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 Tanaka CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Tanaka CoLtd.
Diversification Opportunities for Sabra Health and Tanaka CoLtd
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sabra and Tanaka is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Tanaka CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanaka CoLtd 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 Tanaka CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanaka CoLtd has no effect on the direction of Sabra Health i.e., Sabra Health and Tanaka CoLtd go up and down completely randomly.
Pair Corralation between Sabra Health and Tanaka CoLtd
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.7 times more return on investment than Tanaka CoLtd. However, Sabra Health Care is 1.44 times less risky than Tanaka CoLtd. It trades about 0.16 of its potential returns per unit of risk. Tanaka CoLtd is currently generating about -0.03 per unit of risk. If you would invest 1,304 in Sabra Health Care on September 3, 2024 and sell it today you would earn a total of 468.00 from holding Sabra Health Care or generate 35.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. Tanaka CoLtd
Performance |
| Timeline |
| Sabra Health Care |
| Tanaka CoLtd |
Sabra Health and Tanaka CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Tanaka CoLtd
The main advantage of trading using opposite Sabra Health and Tanaka CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Tanaka CoLtd 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 Tanaka CoLtd will offset losses from the drop in Tanaka CoLtd'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 |
| Tanaka CoLtd vs. Southwest Airlines Co | Tanaka CoLtd vs. WESTLAKE CHEMICAL | Tanaka CoLtd vs. Siamgas And Petrochemicals | Tanaka CoLtd vs. SINGAPORE AIRLINES |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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