Correlation Between Sabre Corpo and Palomar Holdings
Can any of the company-specific risk be diversified away by investing in both Sabre Corpo and Palomar Holdings 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 Sabre Corpo and Palomar Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Corpo and Palomar Holdings, you can compare the effects of market volatilities on Sabre Corpo and Palomar Holdings 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 Sabre Corpo with a short position of Palomar Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Corpo and Palomar Holdings.
Diversification Opportunities for Sabre Corpo and Palomar Holdings
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabre and Palomar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Corpo and Palomar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palomar Holdings and Sabre Corpo 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 Sabre Corpo are associated (or correlated) with Palomar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palomar Holdings has no effect on the direction of Sabre Corpo i.e., Sabre Corpo and Palomar Holdings go up and down completely randomly.
Pair Corralation between Sabre Corpo and Palomar Holdings
Given the investment horizon of 90 days Sabre Corpo is expected to generate 1.32 times less return on investment than Palomar Holdings. In addition to that, Sabre Corpo is 1.94 times more volatile than Palomar Holdings. It trades about 0.03 of its total potential returns per unit of risk. Palomar Holdings is currently generating about 0.08 per unit of volatility. If you would invest 5,943 in Palomar Holdings on August 31, 2024 and sell it today you would earn a total of 4,887 from holding Palomar Holdings or generate 82.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Corpo vs. Palomar Holdings
Performance |
| Timeline |
| Sabre Corpo |
| Palomar Holdings |
Sabre Corpo and Palomar Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Corpo and Palomar Holdings
The main advantage of trading using opposite Sabre Corpo and Palomar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Corpo position performs unexpectedly, Palomar Holdings 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 Palomar Holdings will offset losses from the drop in Palomar Holdings' long position.| Sabre Corpo vs. Expedia Group | Sabre Corpo vs. Trip Group Ltd | Sabre Corpo vs. Booking Holdings | Sabre Corpo vs. Despegar Corp |
| Palomar Holdings vs. Horace Mann Educators | Palomar Holdings vs. Kemper | Palomar Holdings vs. RLI Corp | Palomar Holdings vs. Global Indemnity 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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