Correlation Between Platinum Investment and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Platinum Investment 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 Platinum Investment and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Investment Management and Sabra Health Care, you can compare the effects of market volatilities on Platinum Investment 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 Platinum Investment with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Sabra Health.
Diversification Opportunities for Platinum Investment and Sabra Health
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Platinum and Sabra is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management 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 Platinum Investment 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 Platinum Investment Management 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 Platinum Investment i.e., Platinum Investment and Sabra Health go up and down completely randomly.
Pair Corralation between Platinum Investment and Sabra Health
Assuming the 90 days horizon Platinum Investment Management is expected to generate 2.13 times more return on investment than Sabra Health. However, Platinum Investment is 2.13 times more volatile than Sabra Health Care. It trades about -0.02 of its potential returns per unit of risk. Sabra Health Care is currently generating about -0.05 per unit of risk. If you would invest 41.00 in Platinum Investment Management on September 24, 2024 and sell it today you would lose (3.00) from holding Platinum Investment Management or give up 7.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Platinum Investment Management vs. Sabra Health Care
Performance |
Timeline |
Platinum Investment |
Sabra Health Care |
Platinum Investment and Sabra Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Platinum Investment and Sabra Health
The main advantage of trading using opposite Platinum Investment and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment 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.Platinum Investment vs. ANTA SPORTS PRODUCT | Platinum Investment vs. ATOSS SOFTWARE | Platinum Investment vs. CPU SOFTWAREHOUSE | Platinum Investment vs. PSI Software AG |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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