Correlation Between Realty Income and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both Realty Income 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 Realty Income and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and Sabra Healthcare REIT, you can compare the effects of market volatilities on Realty Income 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 Realty Income with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and Sabra Healthcare.
Diversification Opportunities for Realty Income and Sabra Healthcare
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Realty and Sabra is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income 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 Realty Income 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 Realty Income 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 Realty Income i.e., Realty Income and Sabra Healthcare go up and down completely randomly.
Pair Corralation between Realty Income and Sabra Healthcare
Taking into account the 90-day investment horizon Realty Income is expected to generate 0.81 times more return on investment than Sabra Healthcare. However, Realty Income is 1.24 times less risky than Sabra Healthcare. It trades about -0.31 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about -0.28 per unit of risk. If you would invest 5,719 in Realty Income on September 25, 2024 and sell it today you would lose (417.00) from holding Realty Income or give up 7.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Realty Income vs. Sabra Healthcare REIT
Performance |
Timeline |
Realty Income |
Sabra Healthcare REIT |
Realty Income and Sabra Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Realty Income and Sabra Healthcare
The main advantage of trading using opposite Realty Income and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income 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.Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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