Correlation Between Sabra Healthcare and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Sphere Entertainment 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 Sphere Entertainment 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 Sphere Entertainment Co, you can compare the effects of market volatilities on Sabra Healthcare and Sphere Entertainment 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 Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Sphere Entertainment.
Diversification Opportunities for Sabra Healthcare and Sphere Entertainment
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabra and Sphere is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment 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 Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Sphere Entertainment
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 0.6 times more return on investment than Sphere Entertainment. However, Sabra Healthcare REIT is 1.68 times less risky than Sphere Entertainment. It trades about -0.28 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about -0.31 per unit of risk. If you would invest 1,935 in Sabra Healthcare REIT on September 12, 2024 and sell it today you would lose (179.50) from holding Sabra Healthcare REIT or give up 9.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Sphere Entertainment Co
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Sphere Entertainment |
Sabra Healthcare and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Sphere Entertainment
The main advantage of trading using opposite Sabra Healthcare and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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