Correlation Between Sabra Health and Intel
Can any of the company-specific risk be diversified away by investing in both Sabra Health and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on Sabra Health and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Health and Intel.
Diversification Opportunities for Sabra Health and Intel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sabra and Intel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Health Care and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Sabra Health i.e., Sabra Health and Intel go up and down completely randomly.
Pair Corralation between Sabra Health and Intel
Assuming the 90 days horizon Sabra Health Care is expected to under-perform the Intel. But the stock apears to be less risky and, when comparing its historical volatility, Sabra Health Care is 1.84 times less risky than Intel. The stock trades about -0.06 of its potential returns per unit of risk. The Intel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,287 in Intel on December 3, 2024 and sell it today you would lose (2.00) from holding Intel or give up 0.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sabra Health Care vs. Intel
Performance |
Timeline |
Sabra Health Care |
Intel |
Sabra Health and Intel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sabra Health and Intel
The main advantage of trading using opposite Sabra Health and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabra Health position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.Sabra Health vs. Goosehead Insurance | Sabra Health vs. Zurich Insurance Group | Sabra Health vs. Ping An Insurance | Sabra Health vs. Gaming and Leisure |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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