Correlation Between Sabre Insurance and KOWORLD AG
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and KOWORLD AG 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 KOWORLD AG 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 KOWORLD AG, you can compare the effects of market volatilities on Sabre Insurance and KOWORLD AG 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 KOWORLD AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and KOWORLD AG.
Diversification Opportunities for Sabre Insurance and KOWORLD AG
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabre and KOWORLD is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG 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 KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and KOWORLD AG go up and down completely randomly.
Pair Corralation between Sabre Insurance and KOWORLD AG
Assuming the 90 days horizon Sabre Insurance Group is expected to generate 0.74 times more return on investment than KOWORLD AG. However, Sabre Insurance Group is 1.36 times less risky than KOWORLD AG. It trades about -0.03 of its potential returns per unit of risk. KOWORLD AG is currently generating about -0.03 per unit of risk. If you would invest 184.00 in Sabre Insurance Group on September 13, 2024 and sell it today you would lose (15.00) from holding Sabre Insurance Group or give up 8.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. KOWORLD AG
Performance |
| Timeline |
| Sabre Insurance Group |
| KOWORLD AG |
Sabre Insurance and KOWORLD AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and KOWORLD AG
The main advantage of trading using opposite Sabre Insurance and KOWORLD AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, KOWORLD AG 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 KOWORLD AG will offset losses from the drop in KOWORLD AG's long position.| Sabre Insurance vs. Superior Plus Corp | Sabre Insurance vs. SIVERS SEMICONDUCTORS AB | Sabre Insurance vs. CHINA HUARONG ENERHD 50 | Sabre Insurance vs. NORDIC HALIBUT AS |
| KOWORLD AG vs. Pure Storage | KOWORLD AG vs. SOFI TECHNOLOGIES | KOWORLD AG vs. Datang International Power | KOWORLD AG vs. GLG LIFE TECH |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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