Correlation Between Prosiebensat and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Prosiebensat 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 Prosiebensat and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosiebensat 1 Media and Sabre Insurance Group, you can compare the effects of market volatilities on Prosiebensat 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 Prosiebensat with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Sabre Insurance.
Diversification Opportunities for Prosiebensat and Sabre Insurance
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prosiebensat and Sabre is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media 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 Prosiebensat 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 Prosiebensat 1 Media 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 Prosiebensat i.e., Prosiebensat and Sabre Insurance go up and down completely randomly.
Pair Corralation between Prosiebensat and Sabre Insurance
Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to under-perform the Sabre Insurance. In addition to that, Prosiebensat is 1.45 times more volatile than Sabre Insurance Group. It trades about -0.03 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. Sabre Insurance Group
Performance |
| Timeline |
| Prosiebensat 1 Media |
| Sabre Insurance Group |
Prosiebensat and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and Sabre Insurance
The main advantage of trading using opposite Prosiebensat and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat 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.| Prosiebensat vs. Polar Capital Technology | Prosiebensat vs. Bytes Technology | Prosiebensat vs. Take Two Interactive Software | Prosiebensat vs. Vulcan Materials Co |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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