Correlation Between Weyco and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both Weyco 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 Weyco and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and Sabra Healthcare REIT, you can compare the effects of market volatilities on Weyco 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 Weyco with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Sabra Healthcare.
Diversification Opportunities for Weyco and Sabra Healthcare
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Weyco and Sabra is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group 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 Weyco 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 Weyco Group 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 Weyco i.e., Weyco and Sabra Healthcare go up and down completely randomly.
Pair Corralation between Weyco and Sabra Healthcare
Given the investment horizon of 90 days Weyco Group is expected to generate 2.39 times more return on investment than Sabra Healthcare. However, Weyco is 2.39 times more volatile than Sabra Healthcare REIT. It trades about 0.1 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.0 per unit of risk. If you would invest 3,344 in Weyco Group on August 26, 2024 and sell it today you would earn a total of 301.00 from holding Weyco Group or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyco Group vs. Sabra Healthcare REIT
Performance |
| Timeline |
| Weyco Group |
| Sabra Healthcare REIT |
Weyco and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and Sabra Healthcare
The main advantage of trading using opposite Weyco and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco 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.The idea behind Weyco Group 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.| Sabra Healthcare vs. Healthcare Realty Trust | Sabra Healthcare vs. Healthpeak Properties | Sabra Healthcare vs. Community Healthcare Trust | Sabra Healthcare vs. Universal Health Realty |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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