Correlation Between Sabra Healthcare and Rexford Industrial
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Rexford Industrial 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 Rexford Industrial 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 Rexford Industrial Realty, you can compare the effects of market volatilities on Sabra Healthcare and Rexford Industrial 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 Rexford Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Rexford Industrial.
Diversification Opportunities for Sabra Healthcare and Rexford Industrial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sabra and Rexford is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Rexford Industrial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rexford Industrial Realty 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 Rexford Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rexford Industrial Realty has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Rexford Industrial go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Rexford Industrial
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 1.37 times more return on investment than Rexford Industrial. However, Sabra Healthcare is 1.37 times more volatile than Rexford Industrial Realty. It trades about -0.03 of its potential returns per unit of risk. Rexford Industrial Realty is currently generating about -0.1 per unit of risk. If you would invest 1,926 in Sabra Healthcare REIT on August 31, 2024 and sell it today you would lose (35.00) from holding Sabra Healthcare REIT or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Rexford Industrial Realty
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Rexford Industrial Realty |
Sabra Healthcare and Rexford Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Rexford Industrial
The main advantage of trading using opposite Sabra Healthcare and Rexford Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Rexford Industrial 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 Rexford Industrial will offset losses from the drop in Rexford Industrial's long position.| Sabra Healthcare vs. LTC Properties | Sabra Healthcare vs. Healthpeak Properties | Sabra Healthcare vs. Omega Healthcare Investors | Sabra Healthcare vs. Ventas Inc |
| Rexford Industrial vs. Plymouth Industrial REIT | Rexford Industrial vs. EastGroup Properties | Rexford Industrial vs. LXP Industrial Trust | Rexford Industrial vs. Terreno 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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