Correlation Between Maanshan Iron and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron 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 Maanshan Iron and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maanshan Iron Steel and Sabre Insurance Group, you can compare the effects of market volatilities on Maanshan Iron 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 Maanshan Iron with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Sabre Insurance.
Diversification Opportunities for Maanshan Iron and Sabre Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Maanshan and Sabre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel 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 Maanshan Iron 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 Maanshan Iron Steel 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 Maanshan Iron i.e., Maanshan Iron and Sabre Insurance go up and down completely randomly.
Pair Corralation between Maanshan Iron and Sabre Insurance
Assuming the 90 days horizon Maanshan Iron Steel is expected to generate 1.48 times more return on investment than Sabre Insurance. However, Maanshan Iron is 1.48 times more volatile than Sabre Insurance Group. It trades about -0.01 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.04 per unit of risk. If you would invest 22.00 in Maanshan Iron Steel on August 31, 2024 and sell it today you would lose (10.00) from holding Maanshan Iron Steel or give up 45.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maanshan Iron Steel vs. Sabre Insurance Group
Performance |
| Timeline |
| Maanshan Iron Steel |
| Sabre Insurance Group |
Maanshan Iron and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and Sabre Insurance
The main advantage of trading using opposite Maanshan Iron and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron 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.| Maanshan Iron vs. Olympic Steel | Maanshan Iron vs. POSCO Holdings | Maanshan Iron vs. Steel Dynamics | Maanshan Iron vs. Universal Stainless Alloy |
| Sabre Insurance vs. Marsh McLennan Companies | Sabre Insurance vs. Arthur J Gallagher | Sabre Insurance vs. Brown Brown | Sabre Insurance vs. Willis Towers Watson |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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