Correlation Between CHARLES and Sabra Healthcare

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Can any of the company-specific risk be diversified away by investing in both CHARLES 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 CHARLES and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHARLES SCHWAB PORATION and Sabra Healthcare REIT, you can compare the effects of market volatilities on CHARLES 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 CHARLES with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHARLES and Sabra Healthcare.

Diversification Opportunities for CHARLES and Sabra Healthcare

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between CHARLES and Sabra is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CHARLES SCHWAB PORATION 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 CHARLES 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 CHARLES SCHWAB PORATION 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 CHARLES i.e., CHARLES and Sabra Healthcare go up and down completely randomly.

Pair Corralation between CHARLES and Sabra Healthcare

Assuming the 90 days trading horizon CHARLES is expected to generate 633.0 times less return on investment than Sabra Healthcare. But when comparing it to its historical volatility, CHARLES SCHWAB PORATION is 3.24 times less risky than Sabra Healthcare. It trades about 0.0 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,058  in Sabra Healthcare REIT on September 2, 2024 and sell it today you would earn a total of  815.00  from holding Sabra Healthcare REIT or generate 77.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

CHARLES SCHWAB PORATION  vs.  Sabra Healthcare REIT

 Performance 
       Timeline  
CHARLES SCHWAB PORATION 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CHARLES SCHWAB PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CHARLES is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Sabra Healthcare REIT 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sabra Healthcare REIT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sabra Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CHARLES and Sabra Healthcare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CHARLES and Sabra Healthcare

The main advantage of trading using opposite CHARLES and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHARLES 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.
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The idea behind CHARLES SCHWAB PORATION and Sabra Healthcare REIT 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.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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