Correlation Between Sabre Insurance and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Columbia Sportswear 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 Columbia Sportswear 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 Columbia Sportswear, you can compare the effects of market volatilities on Sabre Insurance and Columbia Sportswear 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 Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Columbia Sportswear.
Diversification Opportunities for Sabre Insurance and Columbia Sportswear
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabre and Columbia is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear 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 Columbia Sportswear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sportswear has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Columbia Sportswear go up and down completely randomly.
Pair Corralation between Sabre Insurance and Columbia Sportswear
Assuming the 90 days horizon Sabre Insurance Group is expected to generate 1.28 times more return on investment than Columbia Sportswear. However, Sabre Insurance is 1.28 times more volatile than Columbia Sportswear. It trades about 0.04 of its potential returns per unit of risk. Columbia Sportswear is currently generating about 0.01 per unit of risk. If you would invest 114.00 in Sabre Insurance Group on August 30, 2024 and sell it today you would earn a total of 42.00 from holding Sabre Insurance Group or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sabre Insurance Group vs. Columbia Sportswear
Performance |
| Timeline |
| Sabre Insurance Group |
| Columbia Sportswear |
Sabre Insurance and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Columbia Sportswear
The main advantage of trading using opposite Sabre Insurance and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Columbia Sportswear 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 Columbia Sportswear will offset losses from the drop in Columbia Sportswear's long position.| Sabre Insurance vs. LANDSEA HOMES P | Sabre Insurance vs. Beazer Homes USA | Sabre Insurance vs. Taylor Morrison Home | Sabre Insurance vs. Haverty Furniture Companies |
| Columbia Sportswear vs. ABO GROUP ENVIRONMENT | Columbia Sportswear vs. THORNEY TECHS LTD | Columbia Sportswear vs. CECO ENVIRONMENTAL | Columbia Sportswear vs. Daido Steel Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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