Correlation Between Sabra Healthcare and Cementos Pacasmayo
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Cementos Pacasmayo 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 Cementos Pacasmayo 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 Cementos Pacasmayo SAA, you can compare the effects of market volatilities on Sabra Healthcare and Cementos Pacasmayo 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 Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Cementos Pacasmayo.
Diversification Opportunities for Sabra Healthcare and Cementos Pacasmayo
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabra and Cementos is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA 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 Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Cementos Pacasmayo go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Cementos Pacasmayo
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 0.77 times more return on investment than Cementos Pacasmayo. However, Sabra Healthcare REIT is 1.3 times less risky than Cementos Pacasmayo. It trades about 0.02 of its potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about -0.22 per unit of risk. If you would invest 1,730 in Sabra Healthcare REIT on January 13, 2025 and sell it today you would earn a total of 5.00 from holding Sabra Healthcare REIT or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Cementos Pacasmayo SAA
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Cementos Pacasmayo SAA |
Sabra Healthcare and Cementos Pacasmayo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Cementos Pacasmayo
The main advantage of trading using opposite Sabra Healthcare and Cementos Pacasmayo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Cementos Pacasmayo 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 Cementos Pacasmayo will offset losses from the drop in Cementos Pacasmayo'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 |
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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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