Correlation Between Sabra Healthcare and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Cedar Realty 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 Cedar Realty 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 Cedar Realty Trust, you can compare the effects of market volatilities on Sabra Healthcare and Cedar Realty 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 Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Cedar Realty.
Diversification Opportunities for Sabra Healthcare and Cedar Realty
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabra and Cedar is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Cedar Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cedar Realty Trust 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 Cedar Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cedar Realty Trust has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Cedar Realty go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Cedar Realty
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to under-perform the Cedar Realty. But the stock apears to be less risky and, when comparing its historical volatility, Sabra Healthcare REIT is 1.12 times less risky than Cedar Realty. The stock trades about -0.03 of its potential returns per unit of risk. The Cedar Realty Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,512 in Cedar Realty Trust on August 24, 2024 and sell it today you would earn a total of 47.00 from holding Cedar Realty Trust or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Cedar Realty Trust
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Cedar Realty Trust |
Sabra Healthcare and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Cedar Realty
The main advantage of trading using opposite Sabra Healthcare and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Cedar Realty 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 Cedar Realty will offset losses from the drop in Cedar Realty's long position.| Sabra Healthcare vs. Healthcare Realty Trust | Sabra Healthcare vs. Welltower | Sabra Healthcare vs. American Healthcare REIT, | Sabra Healthcare vs. Diversified Healthcare Trust |
| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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