Correlation Between Sabra Healthcare and Kinsale Capital
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Kinsale Capital 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 Kinsale Capital 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 Kinsale Capital Group, you can compare the effects of market volatilities on Sabra Healthcare and Kinsale Capital 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 Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Kinsale Capital.
Diversification Opportunities for Sabra Healthcare and Kinsale Capital
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabra and Kinsale is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group 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 Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Kinsale Capital go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Kinsale Capital
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to under-perform the Kinsale Capital. But the stock apears to be less risky and, when comparing its historical volatility, Sabra Healthcare REIT is 1.65 times less risky than Kinsale Capital. The stock trades about -0.23 of its potential returns per unit of risk. The Kinsale Capital Group is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 44,428 in Kinsale Capital Group on November 27, 2024 and sell it today you would lose (1,712) from holding Kinsale Capital Group or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Kinsale Capital Group
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Kinsale Capital Group |
Sabra Healthcare and Kinsale Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Kinsale Capital
The main advantage of trading using opposite Sabra Healthcare and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Kinsale Capital 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 Kinsale Capital will offset losses from the drop in Kinsale Capital'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 |
| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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