Correlation Between Sabre Insurance and Telecom Italia
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Telecom Italia 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 Insurance and Telecom Italia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Insurance Group and Telecom Italia SpA, you can compare the effects of market volatilities on Sabre Insurance and Telecom Italia 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 Insurance with a short position of Telecom Italia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Telecom Italia.
Diversification Opportunities for Sabre Insurance and Telecom Italia
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sabre and Telecom is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Telecom Italia SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Italia SpA and Sabre Insurance 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 Insurance Group are associated (or correlated) with Telecom Italia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Italia SpA has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Telecom Italia go up and down completely randomly.
Pair Corralation between Sabre Insurance and Telecom Italia
Assuming the 90 days trading horizon Sabre Insurance is expected to generate 1.26 times less return on investment than Telecom Italia. But when comparing it to its historical volatility, Sabre Insurance Group is 1.63 times less risky than Telecom Italia. It trades about 0.04 of its potential returns per unit of risk. Telecom Italia SpA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Telecom Italia SpA on September 3, 2024 and sell it today you would earn a total of 6.00 from holding Telecom Italia SpA or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Telecom Italia SpA
Performance |
| Timeline |
| Sabre Insurance Group |
| Telecom Italia SpA |
Sabre Insurance and Telecom Italia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Telecom Italia
The main advantage of trading using opposite Sabre Insurance and Telecom Italia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Telecom Italia 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 Telecom Italia will offset losses from the drop in Telecom Italia's long position.| Sabre Insurance vs. McEwen Mining | Sabre Insurance vs. United Internet AG | Sabre Insurance vs. Universal Display Corp | Sabre Insurance vs. GoldMining |
| Telecom Italia vs. Auto Trader Group | Telecom Italia vs. UNIQA Insurance Group | Telecom Italia vs. GoldMining | Telecom Italia vs. Indutrade AB |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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