Correlation Between Sabra Health and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Omega Healthcare 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 Omega Healthcare 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 Omega Healthcare Investors, you can compare the effects of market volatilities on Sabra Health and Omega Healthcare 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 Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Omega Healthcare.
Diversification Opportunities for Sabra Health and Omega Healthcare
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sabra and Omega is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv 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 Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Sabra Health i.e., Sabra Health and Omega Healthcare go up and down completely randomly.
Pair Corralation between Sabra Health and Omega Healthcare
Assuming the 90 days horizon Sabra Health Care is expected to generate 0.98 times more return on investment than Omega Healthcare. However, Sabra Health Care is 1.02 times less risky than Omega Healthcare. It trades about 0.1 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.1 per unit of risk. If you would invest 1,107 in Sabra Health Care on November 3, 2024 and sell it today you would earn a total of 489.00 from holding Sabra Health Care or generate 44.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Health Care vs. Omega Healthcare Investors
Performance |
| Timeline |
| Sabra Health Care |
| Omega Healthcare Inv |
Sabra Health and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Health and Omega Healthcare
The main advantage of trading using opposite Sabra Health and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's long position.| Sabra Health vs. CompuGroup Medical SE | Sabra Health vs. G III APPAREL GROUP | Sabra Health vs. CVR Medical Corp | Sabra Health vs. WIMFARM SA EO |
| Omega Healthcare vs. Aya Gold Silver | Omega Healthcare vs. Tencent Music Entertainment | Omega Healthcare vs. Nexstar Media Group | Omega Healthcare vs. Urban Outfitters |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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