Correlation Between Sabra Healthcare and FRONTEO

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

Diversification Opportunities for Sabra Healthcare and FRONTEO

0.0

Correlation Coefficient

Sabra Healthcare  FRONTEO

Pay attention - limited upside

The 3 months correlation between Sabra and FRONTEO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and FRONTEO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRONTEO 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 FRONTEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRONTEO has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and FRONTEO go up and down completely randomly.

Pair Corralation between Sabra Healthcare and FRONTEO

If you would invest  1,340  in Sabra Healthcare REIT on March 7, 2024 and sell it today you would earn a total of  121.00  from holding Sabra Healthcare REIT or generate 9.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sabra Healthcare REIT  vs.  FRONTEO

Sabra Healthcare REIT

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sabra Healthcare REIT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sabra Healthcare may actually be approaching a critical reversion point that can send shares even higher in July 2024.

FRONTEO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FRONTEO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, FRONTEO is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sabra Healthcare and FRONTEO

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

The idea behind Sabra Healthcare REIT and FRONTEO 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.