Correlation Between Sabra Healthcare and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and PennantPark Floating 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 PennantPark Floating 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 PennantPark Floating Rate, you can compare the effects of market volatilities on Sabra Healthcare and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and PennantPark Floating.
Diversification Opportunities for Sabra Healthcare and PennantPark Floating
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabra and PennantPark is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and PennantPark Floating go up and down completely randomly.
Pair Corralation between Sabra Healthcare and PennantPark Floating
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to under-perform the PennantPark Floating. In addition to that, Sabra Healthcare is 1.28 times more volatile than PennantPark Floating Rate. It trades about -0.23 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.05 per unit of volatility. If you would invest 1,120 in PennantPark Floating Rate on November 27, 2024 and sell it today you would earn a total of 13.00 from holding PennantPark Floating Rate or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. PennantPark Floating Rate
Performance |
| Timeline |
| Sabra Healthcare REIT |
| PennantPark Floating Rate |
Sabra Healthcare and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and PennantPark Floating
The main advantage of trading using opposite Sabra Healthcare and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating'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 |
| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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