Correlation Between Caledonia Mining and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining 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 Caledonia Mining and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Sabre Insurance Group, you can compare the effects of market volatilities on Caledonia Mining 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 Caledonia Mining with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Sabre Insurance.
Diversification Opportunities for Caledonia Mining and Sabre Insurance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Caledonia and Sabre is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining 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 Caledonia Mining 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 Caledonia Mining 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 Caledonia Mining i.e., Caledonia Mining and Sabre Insurance go up and down completely randomly.
Pair Corralation between Caledonia Mining and Sabre Insurance
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Sabre Insurance. In addition to that, Caledonia Mining is 1.31 times more volatile than Sabre Insurance Group. It trades about -0.23 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.18 per unit of volatility. If you would invest 12,820 in Sabre Insurance Group on September 14, 2024 and sell it today you would earn a total of 860.00 from holding Sabre Insurance Group or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Mining vs. Sabre Insurance Group
Performance |
| Timeline |
| Caledonia Mining |
| Sabre Insurance Group |
Caledonia Mining and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Sabre Insurance
The main advantage of trading using opposite Caledonia Mining and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining 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.| Caledonia Mining vs. Allianz Technology Trust | Caledonia Mining vs. HCA Healthcare | Caledonia Mining vs. Worldwide Healthcare Trust | Caledonia Mining vs. Omega Healthcare Investors |
| Sabre Insurance vs. SupplyMe Capital PLC | Sabre Insurance vs. Lloyds Banking Group | Sabre Insurance vs. Premier African Minerals | Sabre Insurance vs. SANTANDER UK 8 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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