Correlation Between Inspiration Healthcare and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Inspiration Healthcare 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 Inspiration Healthcare and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspiration Healthcare Group and Sabre Insurance Group, you can compare the effects of market volatilities on Inspiration Healthcare 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 Inspiration Healthcare with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspiration Healthcare and Sabre Insurance.
Diversification Opportunities for Inspiration Healthcare and Sabre Insurance
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inspiration and Sabre is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Inspiration Healthcare Group 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 Inspiration Healthcare 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 Inspiration Healthcare Group 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 Inspiration Healthcare i.e., Inspiration Healthcare and Sabre Insurance go up and down completely randomly.
Pair Corralation between Inspiration Healthcare and Sabre Insurance
Assuming the 90 days trading horizon Inspiration Healthcare Group is expected to generate 2.73 times more return on investment than Sabre Insurance. However, Inspiration Healthcare is 2.73 times more volatile than Sabre Insurance Group. It trades about -0.03 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.09 per unit of risk. If you would invest 2,050 in Inspiration Healthcare Group on August 30, 2024 and sell it today you would lose (525.00) from holding Inspiration Healthcare Group or give up 25.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspiration Healthcare Group vs. Sabre Insurance Group
Performance |
| Timeline |
| Inspiration Healthcare |
| Sabre Insurance Group |
Inspiration Healthcare and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspiration Healthcare and Sabre Insurance
The main advantage of trading using opposite Inspiration Healthcare and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspiration Healthcare 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.| Inspiration Healthcare vs. Toyota Motor Corp | Inspiration Healthcare vs. SoftBank Group Corp | Inspiration Healthcare vs. OTP Bank Nyrt | Inspiration Healthcare vs. Las Vegas Sands |
| Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Toyota Motor Corp | Sabre Insurance vs. Reliance Industries Ltd |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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