Correlation Between Baker Steel and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Baker Steel and Sabre Insurance 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 Baker Steel and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Steel Resources and Sabre Insurance Group, you can compare the effects of market volatilities on Baker Steel and Sabre Insurance 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 Baker Steel with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Steel and Sabre Insurance.
Diversification Opportunities for Baker Steel and Sabre Insurance
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baker and Sabre is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Baker Steel Resources and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group and Baker Steel 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 Baker Steel Resources are associated (or correlated) with Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of Baker Steel i.e., Baker Steel and Sabre Insurance go up and down completely randomly.
Pair Corralation between Baker Steel and Sabre Insurance
Assuming the 90 days trading horizon Baker Steel Resources is expected to generate 1.12 times more return on investment than Sabre Insurance. However, Baker Steel is 1.12 times more volatile than Sabre Insurance Group. It trades about 0.39 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.01 per unit of risk. If you would invest 4,750 in Baker Steel Resources on August 27, 2024 and sell it today you would earn a total of 950.00 from holding Baker Steel Resources or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baker Steel Resources vs. Sabre Insurance Group
Performance |
| Timeline |
| Baker Steel Resources |
| Sabre Insurance Group |
Baker Steel and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Steel and Sabre Insurance
The main advantage of trading using opposite Baker Steel and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Steel position performs unexpectedly, Sabre Insurance 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 Sabre Insurance will offset losses from the drop in Sabre Insurance's long position.| Baker Steel vs. Catalyst Media Group | Baker Steel vs. Oncimmune Holdings plc | Baker Steel vs. Invesco Health Care | Baker Steel vs. Coor Service Management |
| Sabre Insurance vs. International Biotechnology Trust | Sabre Insurance vs. Compagnie Plastic Omnium | Sabre Insurance vs. Young Cos Brewery | Sabre Insurance vs. Baker Steel Resources |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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