Correlation Between Sabra Healthcare and EastGroup Properties
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and EastGroup Properties 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 EastGroup Properties 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 EastGroup Properties, you can compare the effects of market volatilities on Sabra Healthcare and EastGroup Properties 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 EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and EastGroup Properties.
Diversification Opportunities for Sabra Healthcare and EastGroup Properties
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabra and EastGroup is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties 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 EastGroup Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EastGroup Properties has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and EastGroup Properties go up and down completely randomly.
Pair Corralation between Sabra Healthcare and EastGroup Properties
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 1.44 times more return on investment than EastGroup Properties. However, Sabra Healthcare is 1.44 times more volatile than EastGroup Properties. It trades about 0.12 of its potential returns per unit of risk. EastGroup Properties is currently generating about -0.09 per unit of risk. If you would invest 1,672 in Sabra Healthcare REIT on September 2, 2024 and sell it today you would earn a total of 201.00 from holding Sabra Healthcare REIT or generate 12.02% 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. EastGroup Properties
Performance |
| Timeline |
| Sabra Healthcare REIT |
| EastGroup Properties |
Sabra Healthcare and EastGroup Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and EastGroup Properties
The main advantage of trading using opposite Sabra Healthcare and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, EastGroup Properties 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 EastGroup Properties will offset losses from the drop in EastGroup Properties' 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 |
| EastGroup Properties vs. Terreno Realty | EastGroup Properties vs. Plymouth Industrial REIT | EastGroup Properties vs. LXP Industrial Trust | EastGroup Properties vs. First Industrial Realty |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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