Correlation Between Sabra Healthcare and Cadence Design
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Cadence Design 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 Healthcare and Cadence Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabra Healthcare REIT and Cadence Design Systems, you can compare the effects of market volatilities on Sabra Healthcare and Cadence Design 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 Healthcare with a short position of Cadence Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Cadence Design.
Diversification Opportunities for Sabra Healthcare and Cadence Design
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sabra and Cadence is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Cadence Design Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Design Systems and Sabra Healthcare 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 Healthcare REIT are associated (or correlated) with Cadence Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Design Systems has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Cadence Design go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Cadence Design
Given the investment horizon of 90 days Sabra Healthcare is expected to generate 1.13 times less return on investment than Cadence Design. But when comparing it to its historical volatility, Sabra Healthcare REIT is 1.29 times less risky than Cadence Design. It trades about 0.08 of its potential returns per unit of risk. Cadence Design Systems is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 16,609 in Cadence Design Systems on September 2, 2024 and sell it today you would earn a total of 14,072 from holding Cadence Design Systems or generate 84.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Cadence Design Systems
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Cadence Design Systems |
Sabra Healthcare and Cadence Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Cadence Design
The main advantage of trading using opposite Sabra Healthcare and Cadence Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Cadence Design 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 Cadence Design will offset losses from the drop in Cadence Design's long position.| Sabra Healthcare vs. Healthcare Realty Trust | Sabra Healthcare vs. Healthpeak Properties | Sabra Healthcare vs. Community Healthcare Trust | Sabra Healthcare vs. Universal Health Realty |
| Cadence Design vs. Workday | Cadence Design vs. Salesforce | Cadence Design vs. Intuit Inc | Cadence Design vs. Snowflake |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |