Correlation Between Aluminumof China and Sabra Health

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aluminumof China 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 Aluminumof China and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Sabra Health Care, you can compare the effects of market volatilities on Aluminumof China 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 Aluminumof China with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Sabra Health.

Diversification Opportunities for Aluminumof China and Sabra Health

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Aluminumof and Sabra is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of 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 Aluminumof China 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 Aluminum of 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 Aluminumof China i.e., Aluminumof China and Sabra Health go up and down completely randomly.

Pair Corralation between Aluminumof China and Sabra Health

Assuming the 90 days horizon Aluminum of is expected to generate 1.66 times more return on investment than Sabra Health. However, Aluminumof China is 1.66 times more volatile than Sabra Health Care. It trades about 0.29 of its potential returns per unit of risk. Sabra Health Care is currently generating about 0.09 per unit of risk. If you would invest  53.00  in Aluminum of on October 22, 2024 and sell it today you would earn a total of  8.00  from holding Aluminum of or generate 15.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aluminum of  vs.  Sabra Health Care

 Performance 
       Timeline  
Aluminumof China 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum of are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Aluminumof China is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
Sabra Health Care 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Aluminumof China and Sabra Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aluminumof China and Sabra Health

The main advantage of trading using opposite Aluminumof China and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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 Aluminum of 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.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios