Correlation Between Century Aluminum and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Century Aluminum 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 Century Aluminum and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Sabre Insurance Group, you can compare the effects of market volatilities on Century Aluminum 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 Century Aluminum with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Sabre Insurance.
Diversification Opportunities for Century Aluminum and Sabre Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and Sabre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum 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 Century Aluminum 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 Century Aluminum 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 Century Aluminum i.e., Century Aluminum and Sabre Insurance go up and down completely randomly.
Pair Corralation between Century Aluminum and Sabre Insurance
Given the investment horizon of 90 days Century Aluminum is expected to generate 1.5 times more return on investment than Sabre Insurance. However, Century Aluminum is 1.5 times more volatile than Sabre Insurance Group. It trades about 0.07 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.04 per unit of risk. If you would invest 960.00 in Century Aluminum on August 31, 2024 and sell it today you would earn a total of 1,344 from holding Century Aluminum or generate 140.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Aluminum vs. Sabre Insurance Group
Performance |
| Timeline |
| Century Aluminum |
| Sabre Insurance Group |
Century Aluminum and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and Sabre Insurance
The main advantage of trading using opposite Century Aluminum and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum 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.| Century Aluminum vs. RLJ Lodging Trust | Century Aluminum vs. Aquagold International | Century Aluminum vs. Stepstone Group | Century Aluminum vs. Morningstar Unconstrained Allocation |
| Sabre Insurance vs. Marsh McLennan Companies | Sabre Insurance vs. Arthur J Gallagher | Sabre Insurance vs. Brown Brown | Sabre Insurance vs. Willis Towers Watson |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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