Correlation Between Sabra Healthcare and Griffon
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Griffon 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 Griffon 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 Griffon, you can compare the effects of market volatilities on Sabra Healthcare and Griffon 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 Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Griffon.
Diversification Opportunities for Sabra Healthcare and Griffon
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabra and Griffon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Griffon go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Griffon
Given the investment horizon of 90 days Sabra Healthcare is expected to generate 1.01 times less return on investment than Griffon. But when comparing it to its historical volatility, Sabra Healthcare REIT is 2.26 times less risky than Griffon. It trades about 0.16 of its potential returns per unit of risk. Griffon is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,685 in Griffon on September 2, 2024 and sell it today you would earn a total of 1,745 from holding Griffon or generate 26.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Griffon
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Griffon |
Sabra Healthcare and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Griffon
The main advantage of trading using opposite Sabra Healthcare and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon'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 |
| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |