Correlation Between Sabra Healthcare and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on Sabra Healthcare and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Fevertree Drinks.
Diversification Opportunities for Sabra Healthcare and Fevertree Drinks
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sabra and Fevertree is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Fevertree Drinks
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 0.51 times more return on investment than Fevertree Drinks. However, Sabra Healthcare REIT is 1.97 times less risky than Fevertree Drinks. It trades about 0.12 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.07 per unit of risk. If you would invest 1,035 in Sabra Healthcare REIT on August 31, 2024 and sell it today you would earn a total of 838.00 from holding Sabra Healthcare REIT or generate 80.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 74.06% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Fevertree Drinks Plc
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Fevertree Drinks Plc |
Sabra Healthcare and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Fevertree Drinks
The main advantage of trading using opposite Sabra Healthcare and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Sabra Healthcare vs. LTC Properties | Sabra Healthcare vs. Omega Healthcare Investors | Sabra Healthcare vs. Ventas Inc | Sabra Healthcare vs. Community Healthcare Trust |
| Fevertree Drinks vs. PepsiCo | Fevertree Drinks vs. Coca Cola Consolidated | Fevertree Drinks vs. Monster Beverage Corp | Fevertree Drinks vs. Celsius Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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