Correlation Between PENN NATL and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both PENN NATL 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 PENN NATL and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN NATL GAMING and Sabre Insurance Group, you can compare the effects of market volatilities on PENN NATL 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 PENN NATL with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Sabre Insurance.
Diversification Opportunities for PENN NATL and Sabre Insurance
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PENN and Sabre is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING 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 PENN NATL 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 PENN NATL GAMING 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 PENN NATL i.e., PENN NATL and Sabre Insurance go up and down completely randomly.
Pair Corralation between PENN NATL and Sabre Insurance
Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the Sabre Insurance. In addition to that, PENN NATL is 1.49 times more volatile than Sabre Insurance Group. It trades about -0.02 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.05 per unit of volatility. If you would invest 105.00 in Sabre Insurance Group on October 27, 2024 and sell it today you would earn a total of 54.00 from holding Sabre Insurance Group or generate 51.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Sabre Insurance Group
Performance |
| Timeline |
| PENN NATL GAMING |
| Sabre Insurance Group |
PENN NATL and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Sabre Insurance
The main advantage of trading using opposite PENN NATL and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL 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.| PENN NATL vs. COSMOSTEEL HLDGS | PENN NATL vs. United Breweries Co | PENN NATL vs. RELIANCE STEEL AL | PENN NATL vs. Khiron Life Sciences |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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