Correlation Between Lead Real and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both Lead Real 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 Lead Real and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lead Real Estate and Sabra Healthcare REIT, you can compare the effects of market volatilities on Lead Real 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 Lead Real with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lead Real and Sabra Healthcare.
Diversification Opportunities for Lead Real and Sabra Healthcare
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lead and Sabra is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lead Real Estate 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 Lead Real 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 Lead Real Estate 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 Lead Real i.e., Lead Real and Sabra Healthcare go up and down completely randomly.
Pair Corralation between Lead Real and Sabra Healthcare
Considering the 90-day investment horizon Lead Real Estate is expected to under-perform the Sabra Healthcare. In addition to that, Lead Real is 4.85 times more volatile than Sabra Healthcare REIT. It trades about -0.09 of its total potential returns per unit of risk. Sabra Healthcare REIT is currently generating about -0.31 per unit of volatility. If you would invest 1,852 in Sabra Healthcare REIT on September 25, 2024 and sell it today you would lose (161.00) from holding Sabra Healthcare REIT or give up 8.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lead Real Estate vs. Sabra Healthcare REIT
Performance |
Timeline |
Lead Real Estate |
Sabra Healthcare REIT |
Lead Real and Sabra Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lead Real and Sabra Healthcare
The main advantage of trading using opposite Lead Real and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lead Real 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.Lead Real vs. Lifevantage | Lead Real vs. NH Foods Ltd | Lead Real vs. Hudson Technologies | Lead Real vs. Ecolab Inc |
Sabra Healthcare vs. Realty Income | Sabra Healthcare vs. Park Hotels Resorts | Sabra Healthcare vs. Power REIT | Sabra Healthcare vs. Urban Edge Properties |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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