Correlation Between Sabra Healthcare and Americold Realty

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

By analyzing existing cross correlation between Sabra Healthcare REIT and Americold Realty Trust, you can compare the effects of market volatilities on Sabra Healthcare and Americold Realty 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 Healthcare with a short position of Americold Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Americold Realty.

Diversification Opportunities for Sabra Healthcare and Americold Realty

-0.53

Correlation Coefficient

Sabra Healthcare  Americold Realty

Excellent diversification

The 3 months correlation between Sabra and Americold is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Americold Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americold Realty Trust and Sabra Healthcare 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 Healthcare REIT are associated (or correlated) with Americold Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americold Realty Trust has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Americold Realty go up and down completely randomly.

Pair Corralation between Sabra Healthcare and Americold Realty

Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 0.97 times more return on investment than Americold Realty. However, Sabra Healthcare REIT is 1.03 times less risky than Americold Realty. It trades about 0.12 of its potential returns per unit of risk. Americold Realty Trust is currently generating about -0.18 per unit of risk. If you would invest  1,672  in Sabra Healthcare REIT on September 1, 2024 and sell it today you would earn a total of  201.00  from holding Sabra Healthcare REIT or generate 12.02% return on investment over 90 days.

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

Sabra Healthcare REIT  vs.  Americold Realty Trust

Sabra Healthcare REIT

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sabra Healthcare REIT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Sabra Healthcare may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Americold Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Americold Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Sabra Healthcare and Americold Realty

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

The idea behind Sabra Healthcare REIT and Americold Realty Trust 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.