Correlation Between Sabre Insurance and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Cardinal Health 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 Cardinal Health 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 Cardinal Health, you can compare the effects of market volatilities on Sabre Insurance and Cardinal Health 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 Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Cardinal Health.
Diversification Opportunities for Sabre Insurance and Cardinal Health
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sabre and Cardinal is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health 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 Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Cardinal Health go up and down completely randomly.
Pair Corralation between Sabre Insurance and Cardinal Health
Assuming the 90 days trading horizon Sabre Insurance is expected to generate 6.76 times less return on investment than Cardinal Health. In addition to that, Sabre Insurance is 1.21 times more volatile than Cardinal Health. It trades about 0.01 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.08 per unit of volatility. If you would invest 8,277 in Cardinal Health on August 31, 2024 and sell it today you would earn a total of 3,958 from holding Cardinal Health or generate 47.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Sabre Insurance Group vs. Cardinal Health
Performance |
| Timeline |
| Sabre Insurance Group |
| Cardinal Health |
Sabre Insurance and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Cardinal Health
The main advantage of trading using opposite Sabre Insurance and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| Sabre Insurance vs. National Beverage Corp | Sabre Insurance vs. United Internet AG | Sabre Insurance vs. Futura Medical | Sabre Insurance vs. Tyson Foods Cl |
| Cardinal Health vs. Neometals | Cardinal Health vs. Coor Service Management | Cardinal Health vs. Aeorema Communications Plc | Cardinal Health vs. JLEN Environmental Assets |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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