Correlation Between Lowland Investment and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Lowland Investment 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 Lowland Investment and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowland Investment Co and Sabre Insurance Group, you can compare the effects of market volatilities on Lowland Investment 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 Lowland Investment with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowland Investment and Sabre Insurance.
Diversification Opportunities for Lowland Investment and Sabre Insurance
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lowland and Sabre is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lowland Investment 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 Lowland Investment 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 Lowland Investment 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 Lowland Investment i.e., Lowland Investment and Sabre Insurance go up and down completely randomly.
Pair Corralation between Lowland Investment and Sabre Insurance
Assuming the 90 days trading horizon Lowland Investment is expected to generate 2.2 times less return on investment than Sabre Insurance. But when comparing it to its historical volatility, Lowland Investment Co is 1.55 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 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,736 in Sabre Insurance Group on August 24, 2024 and sell it today you would earn a total of 3,444 from holding Sabre Insurance Group or generate 35.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowland Investment Co vs. Sabre Insurance Group
Performance |
| Timeline |
| Lowland Investment |
| Sabre Insurance Group |
Lowland Investment and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowland Investment and Sabre Insurance
The main advantage of trading using opposite Lowland Investment and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowland Investment 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.| Lowland Investment vs. Beowulf Mining | Lowland Investment vs. McEwen Mining | Lowland Investment vs. Greenroc Mining PLC | Lowland Investment vs. GlobalData PLC |
| Sabre Insurance vs. Verizon Communications | Sabre Insurance vs. Zegona Communications Plc | Sabre Insurance vs. National Beverage Corp | Sabre Insurance vs. Gamma Communications PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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