Correlation Between EPSILON HEALTHCARE and Sabra Health

Can any of the company-specific risk be diversified away by investing in both EPSILON 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 EPSILON 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 EPSILON HEALTHCARE LTD and Sabra Health Care, you can compare the effects of market volatilities on EPSILON 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 EPSILON HEALTHCARE with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and Sabra Health.

Diversification Opportunities for EPSILON HEALTHCARE and Sabra Health

0.0

Correlation Coefficient

EPSILON HEALTHCARE  Sabra Health

Pay attention - limited upside

The 3 months correlation between EPSILON and Sabra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD 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 EPSILON 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 EPSILON HEALTHCARE LTD 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 EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and Sabra Health go up and down completely randomly.

Pair Corralation between EPSILON HEALTHCARE and Sabra Health

If you would invest  1,580  in Sabra Health Care on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Sabra Health Care or generate 0.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

EPSILON HEALTHCARE LTD  vs.  Sabra Health Care

EPSILON HEALTHCARE LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days EPSILON HEALTHCARE LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, EPSILON HEALTHCARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sabra Health Care

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabra Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sabra Health is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EPSILON HEALTHCARE and Sabra Health

The main advantage of trading using opposite EPSILON HEALTHCARE and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON 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.

The idea behind EPSILON HEALTHCARE LTD and Sabra Health Care 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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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.