Correlation Between Sabre Insurance and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and NTG Nordic 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 NTG Nordic 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 NTG Nordic Transport, you can compare the effects of market volatilities on Sabre Insurance and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and NTG Nordic.
Diversification Opportunities for Sabre Insurance and NTG Nordic
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabre and NTG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and NTG Nordic go up and down completely randomly.
Pair Corralation between Sabre Insurance and NTG Nordic
Assuming the 90 days horizon Sabre Insurance Group is expected to under-perform the NTG Nordic. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 1.49 times less risky than NTG Nordic. The stock trades about -0.12 of its potential returns per unit of risk. The NTG Nordic Transport is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 4,035 in NTG Nordic Transport on August 30, 2024 and sell it today you would lose (205.00) from holding NTG Nordic Transport or give up 5.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. NTG Nordic Transport
Performance |
| Timeline |
| Sabre Insurance Group |
| NTG Nordic Transport |
Sabre Insurance and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and NTG Nordic
The main advantage of trading using opposite Sabre Insurance and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic'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 |
| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. Talanx AG |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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