Correlation Between Sabra Healthcare and Mesa Air
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Mesa Air 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 Mesa Air 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 Mesa Air Group, you can compare the effects of market volatilities on Sabra Healthcare and Mesa Air 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 Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Mesa Air.
Diversification Opportunities for Sabra Healthcare and Mesa Air
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sabra and Mesa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Mesa Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Air 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 Mesa Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Air Group has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Mesa Air go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Mesa Air
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 0.78 times more return on investment than Mesa Air. However, Sabra Healthcare REIT is 1.29 times less risky than Mesa Air. It trades about 0.0 of its potential returns per unit of risk. Mesa Air Group is currently generating about -0.03 per unit of risk. If you would invest 1,849 in Sabra Healthcare REIT on August 26, 2024 and sell it today you would lose (8.00) from holding Sabra Healthcare REIT or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Mesa Air Group
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Mesa Air Group |
Sabra Healthcare and Mesa Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Mesa Air
The main advantage of trading using opposite Sabra Healthcare and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Mesa Air 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 Mesa Air will offset losses from the drop in Mesa Air'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 |
| Mesa Air vs. Allegiant Travel | Mesa Air vs. Sun Country Airlines | Mesa Air vs. Frontier Group Holdings | Mesa Air vs. Azul SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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