Correlation Between Gamma Communications and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Gamma Communications 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 Gamma Communications and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications PLC and Sabre Insurance Group, you can compare the effects of market volatilities on Gamma Communications 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 Gamma Communications with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Sabre Insurance.
Diversification Opportunities for Gamma Communications and Sabre Insurance
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gamma and Sabre is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications PLC 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 Gamma Communications 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 Gamma Communications PLC 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 Gamma Communications i.e., Gamma Communications and Sabre Insurance go up and down completely randomly.
Pair Corralation between Gamma Communications and Sabre Insurance
Assuming the 90 days trading horizon Gamma Communications PLC is expected to under-perform the Sabre Insurance. In addition to that, Gamma Communications is 1.27 times more volatile than Sabre Insurance Group. It trades about -0.26 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.13 per unit of volatility. If you would invest 13,840 in Sabre Insurance Group on November 8, 2024 and sell it today you would lose (520.00) from holding Sabre Insurance Group or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications PLC vs. Sabre Insurance Group
Performance |
| Timeline |
| Gamma Communications PLC |
| Sabre Insurance Group |
Gamma Communications and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Sabre Insurance
The main advantage of trading using opposite Gamma Communications and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications 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.| Gamma Communications vs. Wyndham Hotels Resorts | Gamma Communications vs. United Utilities Group | Gamma Communications vs. Zoom Video Communications | Gamma Communications vs. Gaztransport et Technigaz |
| Sabre Insurance vs. LPKF Laser Electronics | Sabre Insurance vs. Liontrust Asset Management | Sabre Insurance vs. New Residential Investment | Sabre Insurance vs. The Mercantile Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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