Correlation Between Sabra Health and BANK HANDLOWY

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

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

Diversification Opportunities for Sabra Health and BANK HANDLOWY

-0.36

Correlation Coefficient

Sabra Health  BANK HANDLOWY

Very good diversification

The 3 months correlation between Sabra and BANK is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY and Sabra Health 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 Sabra Health Care are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Sabra Health i.e., Sabra Health and BANK HANDLOWY go up and down completely randomly.

Pair Corralation between Sabra Health and BANK HANDLOWY

Assuming the 90 days horizon Sabra Health is expected to generate 67.13 times less return on investment than BANK HANDLOWY. In addition to that, Sabra Health is 1.99 times more volatile than BANK HANDLOWY. It trades about 0.0 of its total potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.53 per unit of volatility. If you would invest  2,070  in BANK HANDLOWY on December 28, 2024 and sell it today you would earn a total of  760.00  from holding BANK HANDLOWY or generate 36.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sabra Health Care  vs.  BANK HANDLOWY

Sabra Health Care

Risk-Adjusted Performance

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.

BANK HANDLOWY

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in BANK HANDLOWY are ranked lower than 41 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BANK HANDLOWY unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sabra Health and BANK HANDLOWY

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

The idea behind Sabra Health Care and BANK HANDLOWY 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.