Correlation Between Sekisui Chemical and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Sekisui Chemical and Sabra Health 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 Sekisui Chemical and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekisui Chemical Co and Sabra Health Care, you can compare the effects of market volatilities on Sekisui Chemical and Sabra Health 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 Sekisui Chemical with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekisui Chemical and Sabra Health.
Diversification Opportunities for Sekisui Chemical and Sabra Health
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sekisui and Sabra is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sekisui Chemical Co and Sabra Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Health Care and Sekisui Chemical 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 Sekisui Chemical Co are associated (or correlated) with Sabra Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Health Care has no effect on the direction of Sekisui Chemical i.e., Sekisui Chemical and Sabra Health go up and down completely randomly.
Pair Corralation between Sekisui Chemical and Sabra Health
Assuming the 90 days horizon Sekisui Chemical Co is expected to generate 0.97 times more return on investment than Sabra Health. However, Sekisui Chemical Co is 1.03 times less risky than Sabra Health. It trades about 0.09 of its potential returns per unit of risk. Sabra Health Care is currently generating about 0.03 per unit of risk. If you would invest 1,360 in Sekisui Chemical Co on September 13, 2024 and sell it today you would earn a total of 120.00 from holding Sekisui Chemical Co or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekisui Chemical Co vs. Sabra Health Care
Performance |
| Timeline |
| Sekisui Chemical |
| Sabra Health Care |
Sekisui Chemical and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekisui Chemical and Sabra Health
The main advantage of trading using opposite Sekisui Chemical and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekisui Chemical position performs unexpectedly, Sabra Health 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 Health will offset losses from the drop in Sabra Health's long position.| Sekisui Chemical vs. Lennar | Sekisui Chemical vs. Superior Plus Corp | Sekisui Chemical vs. SIVERS SEMICONDUCTORS AB | Sekisui Chemical vs. NorAm Drilling AS |
| Sabra Health vs. NORWEGIAN AIR SHUT | Sabra Health vs. Sekisui Chemical Co | Sabra Health vs. Altair Engineering | Sabra Health vs. AIR PRODCHEMICALS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |