Correlation Between Sabra Healthcare and Hudson Pacific

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

Diversification Opportunities for Sabra Healthcare and Hudson Pacific

0.43

Correlation Coefficient

Sabra Healthcare  Hudson Pacific

Very weak diversification

The 3 months correlation between Sabra and Hudson is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sabra Healthcare REIT and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific 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 Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of Sabra Healthcare i.e., Sabra Healthcare and Hudson Pacific go up and down completely randomly.

Pair Corralation between Sabra Healthcare and Hudson Pacific

Given the investment horizon of 90 days Sabra Healthcare is expected to generate 4.93 times less return on investment than Hudson Pacific. But when comparing it to its historical volatility, Sabra Healthcare REIT is 2.46 times less risky than Hudson Pacific. It trades about 0.17 of its potential returns per unit of risk. Hudson Pacific Properties is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  229.00  in Hudson Pacific Properties on April 10, 2025 and sell it today you would earn a total of  41.00  from holding Hudson Pacific Properties or generate 17.9% return on investment over 90 days.

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

Sabra Healthcare REIT  vs.  Hudson Pacific Properties

Sabra Healthcare REIT

Risk-Adjusted Performance

Good

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 fragile basic indicators, Sabra Healthcare may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Hudson Pacific Properties

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hudson Pacific Properties are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Hudson Pacific reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sabra Healthcare and Hudson Pacific

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

The idea behind Sabra Healthcare REIT and Hudson Pacific 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.