Correlation Between INFORMATION SVC and Sabra Health
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC 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 INFORMATION SVC and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and Sabra Health Care, you can compare the effects of market volatilities on INFORMATION SVC 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 INFORMATION SVC with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and Sabra Health.
Diversification Opportunities for INFORMATION SVC and Sabra Health
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INFORMATION and Sabra is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP 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 INFORMATION SVC 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 INFORMATION SVC GRP 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 INFORMATION SVC i.e., INFORMATION SVC and Sabra Health go up and down completely randomly.
Pair Corralation between INFORMATION SVC and Sabra Health
Assuming the 90 days horizon INFORMATION SVC GRP is expected to generate 1.33 times more return on investment than Sabra Health. However, INFORMATION SVC is 1.33 times more volatile than Sabra Health Care. It trades about 0.38 of its potential returns per unit of risk. Sabra Health Care is currently generating about 0.18 per unit of risk. If you would invest 288.00 in INFORMATION SVC GRP on September 3, 2024 and sell it today you would earn a total of 58.00 from holding INFORMATION SVC GRP or generate 20.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. Sabra Health Care
Performance |
| Timeline |
| INFORMATION SVC GRP |
| Sabra Health Care |
INFORMATION SVC and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and Sabra Health
The main advantage of trading using opposite INFORMATION SVC and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC 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.| INFORMATION SVC vs. TOTAL GABON | INFORMATION SVC vs. Walgreens Boots Alliance | INFORMATION SVC vs. Peak Resources Limited |
| Sabra Health vs. THAI BEVERAGE | Sabra Health vs. Lifeway Foods | Sabra Health vs. Cal Maine Foods | Sabra Health vs. SENECA FOODS A |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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