Correlation Between Brixmor Property and Sabra Healthcare

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

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

Diversification Opportunities for Brixmor Property and Sabra Healthcare

0.61

Correlation Coefficient

Brixmor Property  Sabra Healthcare

Poor diversification

The 3 months correlation between Brixmor and Sabra is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and Sabra Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Healthcare REIT and Brixmor Property 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 Brixmor Property are associated (or correlated) with Sabra Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Healthcare REIT has no effect on the direction of Brixmor Property i.e., Brixmor Property and Sabra Healthcare go up and down completely randomly.

Pair Corralation between Brixmor Property and Sabra Healthcare

Considering the 90-day investment horizon Brixmor Property is expected to generate 3.31 times less return on investment than Sabra Healthcare. In addition to that, Brixmor Property is 1.02 times more volatile than Sabra Healthcare REIT. It trades about 0.0 of its total potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.01 per unit of volatility. If you would invest  1,392  in Sabra Healthcare REIT on March 13, 2024 and sell it today you would earn a total of  7.00  from holding Sabra Healthcare REIT or generate 0.5% return on investment over 90 days.

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

Brixmor Property  vs.  Sabra Healthcare REIT

Brixmor Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brixmor Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Brixmor Property is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Sabra Healthcare REIT

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Sabra Healthcare REIT has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Brixmor Property and Sabra Healthcare

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

The idea behind Brixmor Property and Sabra Healthcare REIT 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.