Correlation Between Sabre Insurance and Goodyear Tire
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Goodyear Tire 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 Goodyear Tire 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 Goodyear Tire Rubber, you can compare the effects of market volatilities on Sabre Insurance and Goodyear Tire 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 Goodyear Tire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Goodyear Tire.
Diversification Opportunities for Sabre Insurance and Goodyear Tire
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sabre and Goodyear is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Goodyear Tire Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodyear Tire Rubber 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 Goodyear Tire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodyear Tire Rubber has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Goodyear Tire go up and down completely randomly.
Pair Corralation between Sabre Insurance and Goodyear Tire
Assuming the 90 days horizon Sabre Insurance Group is expected to generate 0.8 times more return on investment than Goodyear Tire. However, Sabre Insurance Group is 1.25 times less risky than Goodyear Tire. It trades about 0.04 of its potential returns per unit of risk. Goodyear Tire Rubber is currently generating about 0.01 per unit of risk. If you would invest 115.00 in Sabre Insurance Group on August 27, 2024 and sell it today you would earn a total of 40.00 from holding Sabre Insurance Group or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Goodyear Tire Rubber
Performance |
| Timeline |
| Sabre Insurance Group |
| Goodyear Tire Rubber |
Sabre Insurance and Goodyear Tire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Goodyear Tire
The main advantage of trading using opposite Sabre Insurance and Goodyear Tire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Goodyear Tire 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 Goodyear Tire will offset losses from the drop in Goodyear Tire's long position.| Sabre Insurance vs. Goodyear Tire Rubber | Sabre Insurance vs. Summit Materials | Sabre Insurance vs. Perma Fix Environmental Services | Sabre Insurance vs. Japan Tobacco |
| Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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