Correlation Between Omega Healthcare and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare 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 Omega Healthcare and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omega Healthcare Investors and Sabra Health Care, you can compare the effects of market volatilities on Omega Healthcare 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 Omega Healthcare with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Sabra Health.
Diversification Opportunities for Omega Healthcare and Sabra Health
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Omega and Sabra is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors 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 Omega Healthcare 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 Omega Healthcare Investors 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 Omega Healthcare i.e., Omega Healthcare and Sabra Health go up and down completely randomly.
Pair Corralation between Omega Healthcare and Sabra Health
Assuming the 90 days horizon Omega Healthcare is expected to generate 1.33 times less return on investment than Sabra Health. In addition to that, Omega Healthcare is 1.08 times more volatile than Sabra Health Care. It trades about 0.08 of its total potential returns per unit of risk. Sabra Health Care is currently generating about 0.11 per unit of volatility. If you would invest 1,143 in Sabra Health Care on August 25, 2024 and sell it today you would earn a total of 597.00 from holding Sabra Health Care or generate 52.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Sabra Health Care
Performance |
| Timeline |
| Omega Healthcare Inv |
| Sabra Health Care |
Omega Healthcare and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Sabra Health
The main advantage of trading using opposite Omega Healthcare and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare 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.| Omega Healthcare vs. Welltower | Omega Healthcare vs. Medical Properties Trust | Omega Healthcare vs. Sabra Health Care | Omega Healthcare vs. National Health Investors |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |