Correlation Between Yokohama Rubber and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber 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 Yokohama Rubber and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Yokohama Rubber and Sabra Health Care, you can compare the effects of market volatilities on Yokohama Rubber 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 Yokohama Rubber with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and Sabra Health.
Diversification Opportunities for Yokohama Rubber and Sabra Health
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yokohama and Sabra is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber 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 Yokohama Rubber 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 The Yokohama Rubber 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 Yokohama Rubber i.e., Yokohama Rubber and Sabra Health go up and down completely randomly.
Pair Corralation between Yokohama Rubber and Sabra Health
Assuming the 90 days trading horizon The Yokohama Rubber is expected to generate 1.87 times more return on investment than Sabra Health. However, Yokohama Rubber is 1.87 times more volatile than Sabra Health Care. It trades about 0.08 of its potential returns per unit of risk. Sabra Health Care is currently generating about -0.24 per unit of risk. If you would invest 1,900 in The Yokohama Rubber on September 14, 2024 and sell it today you would earn a total of 60.00 from holding The Yokohama Rubber or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Yokohama Rubber vs. Sabra Health Care
Performance |
| Timeline |
| Yokohama Rubber |
| Sabra Health Care |
Yokohama Rubber and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokohama Rubber and Sabra Health
The main advantage of trading using opposite Yokohama Rubber and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber 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.| Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc |
| Sabra Health vs. The Yokohama Rubber | Sabra Health vs. IMPERIAL TOBACCO | Sabra Health vs. VULCAN MATERIALS | Sabra Health vs. JAPAN TOBACCO UNSPADR12 |
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 Stocks Directory module to find actively traded stocks across global markets.
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