Correlation Between Sabra Healthcare and Gaming Leisure

Can any of the company-specific risk be diversified away by investing in both Sabra Healthcare and Gaming Leisure 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 Gaming Leisure 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 Gaming Leisure Properties, you can compare the effects of market volatilities on Sabra Healthcare and Gaming Leisure 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 Gaming Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabra Healthcare and Gaming Leisure.

Diversification Opportunities for Sabra Healthcare and Gaming Leisure

0.63

Correlation Coefficient

Sabra Healthcare  Gaming Leisure

Poor diversification

The 3 months correlation between Sabra and Gaming is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Gaming Leisure Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Leisure Properties 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 Gaming Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Leisure Properties has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Gaming Leisure go up and down completely randomly.

Pair Corralation between Sabra Healthcare and Gaming Leisure

Given the investment horizon of 90 days Sabra Healthcare is expected to generate 1.32 times less return on investment than Gaming Leisure. In addition to that, Sabra Healthcare is 1.46 times more volatile than Gaming Leisure Properties. It trades about 0.05 of its total potential returns per unit of risk. Gaming Leisure Properties is currently generating about 0.11 per unit of volatility. If you would invest  4,700  in Gaming Leisure Properties on December 28, 2024 and sell it today you would earn a total of  340.00  from holding Gaming Leisure Properties or generate 7.23% return on investment over 90 days.

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

Sabra Healthcare REIT  vs.  Gaming Leisure Properties

Sabra Healthcare REIT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sabra Healthcare REIT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sabra Healthcare is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gaming Leisure Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Leisure Properties are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Gaming Leisure may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sabra Healthcare and Gaming Leisure

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

The idea behind Sabra Healthcare REIT and Gaming Leisure Properties 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.