Correlation Between Fukuyama Transporting and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Fukuyama Transporting 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 Fukuyama Transporting and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fukuyama Transporting Co and Sabre Insurance Group, you can compare the effects of market volatilities on Fukuyama Transporting 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 Fukuyama Transporting with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fukuyama Transporting and Sabre Insurance.
Diversification Opportunities for Fukuyama Transporting and Sabre Insurance
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fukuyama and Sabre is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fukuyama Transporting Co 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 Fukuyama Transporting 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 Fukuyama Transporting Co 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 Fukuyama Transporting i.e., Fukuyama Transporting and Sabre Insurance go up and down completely randomly.
Pair Corralation between Fukuyama Transporting and Sabre Insurance
Assuming the 90 days horizon Fukuyama Transporting is expected to generate 1.24 times less return on investment than Sabre Insurance. But when comparing it to its historical volatility, Fukuyama Transporting Co is 1.14 times less risky than Sabre Insurance. It trades about 0.03 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Sabre Insurance Group on December 16, 2024 and sell it today you would earn a total of 32.00 from holding Sabre Insurance Group or generate 27.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fukuyama Transporting Co vs. Sabre Insurance Group
Performance |
| Timeline |
| Fukuyama Transporting |
| Sabre Insurance Group |
Fukuyama Transporting and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fukuyama Transporting and Sabre Insurance
The main advantage of trading using opposite Fukuyama Transporting and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fukuyama Transporting 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.| Fukuyama Transporting vs. Cleanaway Waste Management | ||
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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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