Correlation Between Xtrackers ShortDAX and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX 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 Xtrackers ShortDAX and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Sabre Insurance Group, you can compare the effects of market volatilities on Xtrackers ShortDAX 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 Xtrackers ShortDAX with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Sabre Insurance.
Diversification Opportunities for Xtrackers ShortDAX and Sabre Insurance
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and Sabre is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX 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 Xtrackers ShortDAX 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 Xtrackers ShortDAX 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 Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Sabre Insurance go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Sabre Insurance
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Sabre Insurance. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.3 times less risky than Sabre Insurance. The etf trades about -0.51 of its potential returns per unit of risk. The Sabre Insurance Group is currently generating about -0.26 of returns per unit of risk over similar time horizon. If you would invest 174.00 in Sabre Insurance Group on November 6, 2024 and sell it today you would lose (17.00) from holding Sabre Insurance Group or give up 9.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Sabre Insurance Group
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Sabre Insurance Group |
Xtrackers ShortDAX and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Sabre Insurance
The main advantage of trading using opposite Xtrackers ShortDAX and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX 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.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Sabre Insurance vs. Brown Brown | Sabre Insurance vs. Steadfast Group Limited | Sabre Insurance vs. KOWORLD AG |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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