Correlation Between Sabra Healthcare and Stepstone
Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Stepstone 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 Stepstone 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 Stepstone Group, you can compare the effects of market volatilities on Sabra Healthcare and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Stepstone.
Diversification Opportunities for Sabra Healthcare and Stepstone
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabra and Stepstone is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Stepstone go up and down completely randomly.
Pair Corralation between Sabra Healthcare and Stepstone
Given the investment horizon of 90 days Sabra Healthcare REIT is expected to under-perform the Stepstone. But the stock apears to be less risky and, when comparing its historical volatility, Sabra Healthcare REIT is 1.57 times less risky than Stepstone. The stock trades about -0.03 of its potential returns per unit of risk. The Stepstone Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,131 in Stepstone Group on August 31, 2024 and sell it today you would earn a total of 473.00 from holding Stepstone Group or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabra Healthcare REIT vs. Stepstone Group
Performance |
| Timeline |
| Sabra Healthcare REIT |
| Stepstone Group |
Sabra Healthcare and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabra Healthcare and Stepstone
The main advantage of trading using opposite Sabra Healthcare and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Healthcare position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Sabra Healthcare vs. LTC Properties | Sabra Healthcare vs. Healthpeak Properties | Sabra Healthcare vs. Omega Healthcare Investors | Sabra Healthcare vs. Ventas Inc |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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