Correlation Between Sabra Healthcare and Q2 Holdings
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Q2 Holdings 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 Q2 Holdings 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 Q2 Holdings, you can compare the effects of market volatilities on Sabra Healthcare and Q2 Holdings 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 Q2 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Q2 Holdings.
Diversification Opportunities for Sabra Healthcare and Q2 Holdings
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sabra and QTWO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Q2 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 Holdings 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 Q2 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Holdings has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Q2 Holdings go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Q2 Holdings
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to under-perform the Q2 Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Sabra Healthcare REIT is 1.71 times less risky than Q2 Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Q2 Holdings is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 8,450 in Q2 Holdings on August 28, 2024 and sell it today you would earn a total of 2,286 from holding Q2 Holdings or generate 27.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Q2 Holdings
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Q2 Holdings |
Sabra Healthcare and Q2 Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Q2 Holdings
The main advantage of trading using opposite Sabra Healthcare and Q2 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Q2 Holdings 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 Q2 Holdings will offset losses from the drop in Q2 Holdings' 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 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |