Correlation Between Sabra Healthcare and CubeSmart
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and CubeSmart 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 CubeSmart 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 CubeSmart, you can compare the effects of market volatilities on Sabra Healthcare and CubeSmart 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 CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and CubeSmart.
Diversification Opportunities for Sabra Healthcare and CubeSmart
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabra and CubeSmart is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart 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 CubeSmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CubeSmart has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and CubeSmart go up and down completely randomly.
Pair Corralation between Sabra Healthcare and CubeSmart
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 1.07 times more return on investment than CubeSmart. However, Sabra Healthcare is 1.07 times more volatile than CubeSmart. It trades about 0.16 of its potential returns per unit of risk. CubeSmart is currently generating about 0.11 per unit of risk. If you would invest 1,378 in Sabra Healthcare REIT on August 24, 2024 and sell it today you would earn a total of 457.00 from holding Sabra Healthcare REIT or generate 33.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. CubeSmart
Performance |
| Timeline |
| Sabra Healthcare REIT |
| CubeSmart |
Sabra Healthcare and CubeSmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and CubeSmart
The main advantage of trading using opposite Sabra Healthcare and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, CubeSmart 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 CubeSmart will offset losses from the drop in CubeSmart's long position.| Sabra Healthcare vs. Healthcare Realty Trust | Sabra Healthcare vs. Community Healthcare Trust | Sabra Healthcare vs. Global Medical REIT | Sabra Healthcare vs. CareTrust REIT |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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