Correlation Between Erste Group and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Erste Group and Sabre Insurance 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 Erste Group and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erste Group Bank and Sabre Insurance Group, you can compare the effects of market volatilities on Erste Group and Sabre Insurance 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 Erste Group with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Sabre Insurance.
Diversification Opportunities for Erste Group and Sabre Insurance
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Erste and Sabre is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group and Erste Group 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 Erste Group Bank are associated (or correlated) with Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of Erste Group i.e., Erste Group and Sabre Insurance go up and down completely randomly.
Pair Corralation between Erste Group and Sabre Insurance
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.06 times more return on investment than Sabre Insurance. However, Erste Group is 1.06 times more volatile than Sabre Insurance Group. It trades about 0.26 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.12 per unit of risk. If you would invest 5,540 in Erste Group Bank on October 11, 2024 and sell it today you would earn a total of 332.00 from holding Erste Group Bank or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Erste Group Bank vs. Sabre Insurance Group
Performance |
| Timeline |
| Erste Group Bank |
| Sabre Insurance Group |
Erste Group and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Sabre Insurance
The main advantage of trading using opposite Erste Group and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Sabre Insurance 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 Sabre Insurance will offset losses from the drop in Sabre Insurance's long position.| Erste Group vs. G5 Entertainment AB | Erste Group vs. Grand Vision Media | Erste Group vs. JD Sports Fashion | Erste Group vs. Baker Steel Resources |
| Sabre Insurance vs. Alien Metals | Sabre Insurance vs. GreenX Metals | Sabre Insurance vs. Dairy Farm International | Sabre Insurance vs. First Class Metals |
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 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.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |