Correlation Between CompuGroup Medical and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical 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 CompuGroup Medical and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical AG and Sabre Insurance Group, you can compare the effects of market volatilities on CompuGroup Medical 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 CompuGroup Medical with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Sabre Insurance.
Diversification Opportunities for CompuGroup Medical and Sabre Insurance
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CompuGroup and Sabre is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG 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 CompuGroup Medical 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 CompuGroup Medical AG 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 CompuGroup Medical i.e., CompuGroup Medical and Sabre Insurance go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Sabre Insurance
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the Sabre Insurance. In addition to that, CompuGroup Medical is 1.41 times more volatile than Sabre Insurance Group. It trades about -0.05 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.04 per unit of volatility. If you would invest 9,533 in Sabre Insurance Group on August 30, 2024 and sell it today you would earn a total of 3,507 from holding Sabre Insurance Group or generate 36.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Sabre Insurance Group
Performance |
| Timeline |
| CompuGroup Medical |
| Sabre Insurance Group |
CompuGroup Medical and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Sabre Insurance
The main advantage of trading using opposite CompuGroup Medical and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical 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.| CompuGroup Medical vs. Tungsten West PLC | CompuGroup Medical vs. Argo Group Limited | CompuGroup Medical vs. Hardide PLC | CompuGroup Medical vs. Versarien PLC |
| Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Toyota Motor Corp | Sabre Insurance vs. Reliance Industries Ltd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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