Correlation Between Bridgetown Holdings and Sabra Healthcare

Can any of the company-specific risk be diversified away by investing in both Bridgetown Holdings and Sabra Healthcare 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 Bridgetown Holdings and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bridgetown Holdings and Sabra Healthcare REIT, you can compare the effects of market volatilities on Bridgetown Holdings and Sabra Healthcare 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 Bridgetown Holdings with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgetown Holdings and Sabra Healthcare.

Diversification Opportunities for Bridgetown Holdings and Sabra Healthcare

0.52

Correlation Coefficient

Bridgetown Holdings  Sabra Healthcare

Very weak diversification

The 3 months correlation between Bridgetown and Sabra is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bridgetown Holdings and Sabra Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Healthcare REIT and Bridgetown Holdings 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 Bridgetown Holdings are associated (or correlated) with Sabra Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Healthcare REIT has no effect on the direction of Bridgetown Holdings i.e., Bridgetown Holdings and Sabra Healthcare go up and down completely randomly.

Pair Corralation between Bridgetown Holdings and Sabra Healthcare

If you would invest  1,837  in Sabra Healthcare REIT on September 5, 2024 and sell it today you would earn a total of  8.00  from holding Sabra Healthcare REIT or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Bridgetown Holdings  vs.  Sabra Healthcare REIT

Bridgetown Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bridgetown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bridgetown Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sabra Healthcare REIT

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sabra Healthcare REIT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sabra Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bridgetown Holdings and Sabra Healthcare

The main advantage of trading using opposite Bridgetown Holdings and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgetown Holdings position performs unexpectedly, Sabra Healthcare 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 Healthcare will offset losses from the drop in Sabra Healthcare's long position.

The idea behind Bridgetown Holdings and Sabra Healthcare REIT 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.