Correlation Between Sabre Insurance and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and HCA Healthcare 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 HCA Healthcare 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 HCA Healthcare, you can compare the effects of market volatilities on Sabre Insurance and HCA Healthcare 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 HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and HCA Healthcare.
Diversification Opportunities for Sabre Insurance and HCA Healthcare
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabre and HCA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare 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 HCA Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Healthcare has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and HCA Healthcare go up and down completely randomly.
Pair Corralation between Sabre Insurance and HCA Healthcare
Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the HCA Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 1.06 times less risky than HCA Healthcare. The stock trades about -0.09 of its potential returns per unit of risk. The HCA Healthcare is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 32,951 in HCA Healthcare on August 30, 2024 and sell it today you would lose (245.00) from holding HCA Healthcare or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Sabre Insurance Group vs. HCA Healthcare
Performance |
| Timeline |
| Sabre Insurance Group |
| HCA Healthcare |
Sabre Insurance and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and HCA Healthcare
The main advantage of trading using opposite Sabre Insurance and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, HCA Healthcare 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 HCA Healthcare will offset losses from the drop in HCA Healthcare's long position.| Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Toyota Motor Corp | Sabre Insurance vs. Reliance Industries Ltd |
| HCA Healthcare vs. Ecofin Global Utilities | HCA Healthcare vs. Qurate Retail Series | HCA Healthcare vs. Norwegian Air Shuttle | HCA Healthcare vs. Delta Air Lines |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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