Correlation Between Sabra Healthcare and Hannon Armstrong
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Hannon Armstrong 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 Hannon Armstrong 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 Hannon Armstrong Sustainable, you can compare the effects of market volatilities on Sabra Healthcare and Hannon Armstrong 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 Hannon Armstrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Hannon Armstrong.
Diversification Opportunities for Sabra Healthcare and Hannon Armstrong
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabra and Hannon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Hannon Armstrong Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannon Armstrong Sus 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 Hannon Armstrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannon Armstrong Sus has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Hannon Armstrong go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Hannon Armstrong
Given the investment horizon of 90 days Sabra Healthcare is expected to generate 1.44 times less return on investment than Hannon Armstrong. But when comparing it to its historical volatility, Sabra Healthcare REIT is 2.12 times less risky than Hannon Armstrong. It trades about 0.11 of its potential returns per unit of risk. Hannon Armstrong Sustainable is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,924 in Hannon Armstrong Sustainable on September 1, 2024 and sell it today you would earn a total of 1,212 from holding Hannon Armstrong Sustainable or generate 62.99% 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. Hannon Armstrong Sustainable
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Hannon Armstrong Sus |
Sabra Healthcare and Hannon Armstrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Hannon Armstrong
The main advantage of trading using opposite Sabra Healthcare and Hannon Armstrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Hannon Armstrong 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 Hannon Armstrong will offset losses from the drop in Hannon Armstrong's long position.| Sabra Healthcare vs. Douglas Emmett | Sabra Healthcare vs. Alexandria Real Estate | Sabra Healthcare vs. Vornado Realty Trust | Sabra Healthcare vs. Highwoods Properties |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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