Correlation Between Sealed Air and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Sabra Healthcare 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 Sealed Air and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Sabra Healthcare REIT, you can compare the effects of market volatilities on Sealed Air and Sabra Healthcare 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 Sealed Air with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Sabra Healthcare.
Diversification Opportunities for Sealed Air and Sabra Healthcare
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Sabra is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Sabra Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Healthcare REIT and Sealed Air 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 Sealed Air are associated (or correlated) with Sabra Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Healthcare REIT has no effect on the direction of Sealed Air i.e., Sealed Air and Sabra Healthcare go up and down completely randomly.
Pair Corralation between Sealed Air and Sabra Healthcare
Considering the 90-day investment horizon Sealed Air is expected to generate 13.72 times less return on investment than Sabra Healthcare. In addition to that, Sealed Air is 1.44 times more volatile than Sabra Healthcare REIT. It trades about 0.01 of its total potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.12 per unit of volatility. If you would invest 1,035 in Sabra Healthcare REIT on August 31, 2024 and sell it today you would earn a total of 838.00 from holding Sabra Healthcare REIT or generate 80.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Sabra Healthcare REIT
Performance |
| Timeline |
| Sealed Air |
| Sabra Healthcare REIT |
Sealed Air and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Sabra Healthcare
The main advantage of trading using opposite Sealed Air and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Sabra Healthcare 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 Sabra Healthcare will offset losses from the drop in Sabra Healthcare's long position.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| Sabra Healthcare vs. LTC Properties | Sabra Healthcare vs. Omega Healthcare Investors | Sabra Healthcare vs. Ventas Inc | Sabra Healthcare vs. Community Healthcare Trust |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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