Correlation Between PureTech Health and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both PureTech Health 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 PureTech Health and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureTech Health plc and Sabre Insurance Group, you can compare the effects of market volatilities on PureTech Health 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 PureTech Health with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Sabre Insurance.
Diversification Opportunities for PureTech Health and Sabre Insurance
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PureTech and Sabre is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health 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 PureTech Health 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 PureTech Health 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 PureTech Health i.e., PureTech Health and Sabre Insurance go up and down completely randomly.
Pair Corralation between PureTech Health and Sabre Insurance
Assuming the 90 days trading horizon PureTech Health plc is expected to under-perform the Sabre Insurance. In addition to that, PureTech Health is 1.29 times more volatile than Sabre Insurance Group. It trades about 0.0 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.11 per unit of volatility. If you would invest 13,240 in Sabre Insurance Group on September 12, 2024 and sell it today you would earn a total of 560.00 from holding Sabre Insurance Group or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health plc vs. Sabre Insurance Group
Performance |
| Timeline |
| PureTech Health plc |
| Sabre Insurance Group |
PureTech Health and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Sabre Insurance
The main advantage of trading using opposite PureTech Health and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health 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.| PureTech Health vs. Mulberry Group PLC | PureTech Health vs. Ikigai Ventures | PureTech Health vs. Neometals | PureTech Health vs. Coor Service Management |
| Sabre Insurance vs. Bloomsbury Publishing Plc | Sabre Insurance vs. Molson Coors Beverage | Sabre Insurance vs. METALL ZUG AG | Sabre Insurance vs. Associated British Foods |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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