Correlation Between Sabra Healthcare and Intuitive Machines

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

Diversification Opportunities for Sabra Healthcare and Intuitive Machines

-0.38

Correlation Coefficient

Sabra Healthcare  Intuitive Machines

Very good diversification

The 3 months correlation between Sabra and Intuitive is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines 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 Intuitive Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Machines has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Intuitive Machines go up and down completely randomly.

Pair Corralation between Sabra Healthcare and Intuitive Machines

Given the investment horizon of 90 days Sabra Healthcare REIT is expected to generate 0.1 times more return on investment than Intuitive Machines. However, Sabra Healthcare REIT is 9.87 times less risky than Intuitive Machines. It trades about 0.04 of its potential returns per unit of risk. Intuitive Machines is currently generating about -0.3 per unit of risk. If you would invest  1,646  in Sabra Healthcare REIT on December 1, 2024 and sell it today you would earn a total of  15.00  from holding Sabra Healthcare REIT or generate 0.91% return on investment over 90 days.

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

Sabra Healthcare REIT  vs.  Intuitive Machines

Sabra Healthcare REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabra Healthcare REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Intuitive Machines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Machines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Sabra Healthcare and Intuitive Machines

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

The idea behind Sabra Healthcare REIT and Intuitive Machines 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.