Correlation Between Scientific Games and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Scientific Games 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 Scientific Games and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Sabra Health Care, you can compare the effects of market volatilities on Scientific Games 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 Scientific Games with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Sabra Health.
Diversification Opportunities for Scientific Games and Sabra Health
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scientific and Sabra is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games 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 Scientific Games 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 Scientific Games 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 Scientific Games i.e., Scientific Games and Sabra Health go up and down completely randomly.
Pair Corralation between Scientific Games and Sabra Health
Assuming the 90 days horizon Scientific Games is expected to generate 1.74 times more return on investment than Sabra Health. However, Scientific Games is 1.74 times more volatile than Sabra Health Care. It trades about 0.11 of its potential returns per unit of risk. Sabra Health Care is currently generating about 0.16 per unit of risk. If you would invest 8,550 in Scientific Games on September 4, 2024 and sell it today you would earn a total of 550.00 from holding Scientific Games or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Scientific Games vs. Sabra Health Care
Performance |
| Timeline |
| Scientific Games |
| Sabra Health Care |
Scientific Games and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and Sabra Health
The main advantage of trading using opposite Scientific Games and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games 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.| Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc |
| Sabra Health vs. Welltower | Sabra Health vs. Omega Healthcare Investors | Sabra Health vs. Medical Properties Trust | Sabra Health vs. National Health Investors |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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