Correlation Between Marsh McLennan and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Marsh McLennan 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 Marsh McLennan and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marsh McLennan Companies and Sabre Insurance Group, you can compare the effects of market volatilities on Marsh McLennan 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 Marsh McLennan with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsh McLennan and Sabre Insurance.
Diversification Opportunities for Marsh McLennan and Sabre Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marsh and Sabre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marsh McLennan Companies 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 Marsh McLennan 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 Marsh McLennan Companies 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 Marsh McLennan i.e., Marsh McLennan and Sabre Insurance go up and down completely randomly.
Pair Corralation between Marsh McLennan and Sabre Insurance
Considering the 90-day investment horizon Marsh McLennan Companies is expected to generate 3.33 times more return on investment than Sabre Insurance. However, Marsh McLennan is 3.33 times more volatile than Sabre Insurance Group. It trades about 0.09 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.08 per unit of risk. If you would invest 19,263 in Marsh McLennan Companies on September 2, 2024 and sell it today you would earn a total of 4,060 from holding Marsh McLennan Companies or generate 21.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marsh McLennan Companies vs. Sabre Insurance Group
Performance |
| Timeline |
| Marsh McLennan Companies |
| Sabre Insurance Group |
Marsh McLennan and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsh McLennan and Sabre Insurance
The main advantage of trading using opposite Marsh McLennan and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsh McLennan 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.| Marsh McLennan vs. Arthur J Gallagher | Marsh McLennan vs. Willis Towers Watson | Marsh McLennan vs. Brown Brown | Marsh McLennan vs. Erie Indemnity |
| Sabre Insurance vs. Jutal Offshore Oil | Sabre Insurance vs. Anheuser Busch Inbev | Sabre Insurance vs. National Beverage Corp | Sabre Insurance vs. Lifevantage |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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