Correlation Between Sparebank and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Sparebank 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 Sparebank and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Sabre Insurance Group, you can compare the effects of market volatilities on Sparebank 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 Sparebank with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Sabre Insurance.
Diversification Opportunities for Sparebank and Sabre Insurance
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparebank and Sabre is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR 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 Sparebank 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 Sparebank 1 SR 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 Sparebank i.e., Sparebank and Sabre Insurance go up and down completely randomly.
Pair Corralation between Sparebank and Sabre Insurance
Assuming the 90 days trading horizon Sparebank 1 SR is expected to generate 0.63 times more return on investment than Sabre Insurance. However, Sparebank 1 SR is 1.59 times less risky than Sabre Insurance. It trades about 0.1 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.0 per unit of risk. If you would invest 11,255 in Sparebank 1 SR on August 29, 2024 and sell it today you would earn a total of 2,955 from holding Sparebank 1 SR or generate 26.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sparebank 1 SR vs. Sabre Insurance Group
Performance |
| Timeline |
| Sparebank 1 SR |
| Sabre Insurance Group |
Sparebank and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Sabre Insurance
The main advantage of trading using opposite Sparebank and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank 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.| Sparebank vs. Lendinvest PLC | Sparebank vs. Neometals | Sparebank vs. Coor Service Management | Sparebank vs. Albion Technology General |
| Sabre Insurance vs. Toyota Motor Corp | Sabre Insurance vs. Lendinvest PLC | Sabre Insurance vs. Neometals | Sabre Insurance vs. Coor Service Management |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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