Correlation Between 3I Group and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both 3I Group 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 3I Group and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3I Group PLC and Sabre Insurance Group, you can compare the effects of market volatilities on 3I Group 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 3I Group with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3I Group and Sabre Insurance.
Diversification Opportunities for 3I Group and Sabre Insurance
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between III and Sabre is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding 3I Group 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 3I Group 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 3I Group 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 3I Group i.e., 3I Group and Sabre Insurance go up and down completely randomly.
Pair Corralation between 3I Group and Sabre Insurance
Assuming the 90 days trading horizon 3I Group PLC is expected to generate 0.81 times more return on investment than Sabre Insurance. However, 3I Group PLC is 1.24 times less risky than Sabre Insurance. It trades about 0.14 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 140,948 in 3I Group PLC on October 12, 2024 and sell it today you would earn a total of 218,452 from holding 3I Group PLC or generate 154.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3I Group PLC vs. Sabre Insurance Group
Performance |
| Timeline |
| 3I Group PLC |
| Sabre Insurance Group |
3I Group and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3I Group and Sabre Insurance
The main advantage of trading using opposite 3I Group and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3I Group 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.| 3I Group vs. Flow Traders NV | 3I Group vs. Grand Vision Media | 3I Group vs. One Media iP | 3I Group vs. Sabre Insurance Group |
| Sabre Insurance vs. Grand Vision Media | Sabre Insurance vs. Prosiebensat 1 Media | Sabre Insurance vs. Universal Display Corp | Sabre Insurance vs. Catalyst Media Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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