Correlation Between Caseys General and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Caseys General 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 Caseys General and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Sabre Insurance Group, you can compare the effects of market volatilities on Caseys General 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 Caseys General with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Sabre Insurance.
Diversification Opportunities for Caseys General and Sabre Insurance
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caseys and Sabre is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores 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 Caseys General 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 Caseys General Stores 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 Caseys General i.e., Caseys General and Sabre Insurance go up and down completely randomly.
Pair Corralation between Caseys General and Sabre Insurance
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.74 times more return on investment than Sabre Insurance. However, Caseys General Stores is 1.35 times less risky than Sabre Insurance. It trades about 0.09 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.05 per unit of risk. If you would invest 20,367 in Caseys General Stores on October 28, 2024 and sell it today you would earn a total of 18,233 from holding Caseys General Stores or generate 89.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Caseys General Stores vs. Sabre Insurance Group
Performance |
Timeline |
Caseys General Stores |
Sabre Insurance Group |
Caseys General and Sabre Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caseys General and Sabre Insurance
The main advantage of trading using opposite Caseys General and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General 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.Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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