Correlation Between Treasury Wine and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Treasury Wine 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 Treasury Wine and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treasury Wine Estates and Sabra Health Care, you can compare the effects of market volatilities on Treasury Wine 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 Treasury Wine with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Sabra Health.
Diversification Opportunities for Treasury Wine and Sabra Health
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Treasury and Sabra is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates 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 Treasury Wine 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 Treasury Wine Estates 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 Treasury Wine i.e., Treasury Wine and Sabra Health go up and down completely randomly.
Pair Corralation between Treasury Wine and Sabra Health
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Sabra Health. In addition to that, Treasury Wine is 1.08 times more volatile than Sabra Health Care. It trades about 0.0 of its total potential returns per unit of risk. Sabra Health Care is currently generating about 0.07 per unit of volatility. If you would invest 955.00 in Sabra Health Care on September 20, 2024 and sell it today you would earn a total of 717.00 from holding Sabra Health Care or generate 75.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Sabra Health Care
Performance |
| Timeline |
| Treasury Wine Estates |
| Sabra Health Care |
Treasury Wine and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Sabra Health
The main advantage of trading using opposite Treasury Wine and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine 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.The idea behind Treasury Wine Estates and Sabra Health Care pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sabra Health vs. Welltower | Sabra Health vs. Superior Plus Corp | Sabra Health vs. NMI Holdings | Sabra Health vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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