Correlation Between Sabre Insurance and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and PennantPark Investment 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 Sabre Insurance and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Insurance Group and PennantPark Investment, you can compare the effects of market volatilities on Sabre Insurance and PennantPark Investment 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 Sabre Insurance with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and PennantPark Investment.
Diversification Opportunities for Sabre Insurance and PennantPark Investment
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sabre and PennantPark is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Sabre Insurance 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 Sabre Insurance Group are associated (or correlated) with PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and PennantPark Investment go up and down completely randomly.
Pair Corralation between Sabre Insurance and PennantPark Investment
Assuming the 90 days horizon Sabre Insurance is expected to generate 1.3 times less return on investment than PennantPark Investment. In addition to that, Sabre Insurance is 1.14 times more volatile than PennantPark Investment. It trades about 0.04 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.06 per unit of volatility. If you would invest 400.00 in PennantPark Investment on August 31, 2024 and sell it today you would earn a total of 233.00 from holding PennantPark Investment or generate 58.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. PennantPark Investment
Performance |
| Timeline |
| Sabre Insurance Group |
| PennantPark Investment |
Sabre Insurance and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and PennantPark Investment
The main advantage of trading using opposite Sabre Insurance and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| Sabre Insurance vs. EHEALTH | Sabre Insurance vs. ATRYS HEALTH SA | Sabre Insurance vs. CARSALESCOM | Sabre Insurance vs. Ramsay Health Care |
| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. NMI Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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