Correlation Between Sabre Insurance and MT Bank
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and MT Bank 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 MT Bank 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 MT Bank Corp, you can compare the effects of market volatilities on Sabre Insurance and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and MT Bank.
Diversification Opportunities for Sabre Insurance and MT Bank
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sabre and 0JW2 is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and MT Bank go up and down completely randomly.
Pair Corralation between Sabre Insurance and MT Bank
Assuming the 90 days trading horizon Sabre Insurance is expected to generate 51.49 times less return on investment than MT Bank. But when comparing it to its historical volatility, Sabre Insurance Group is 1.2 times less risky than MT Bank. It trades about 0.01 of its potential returns per unit of risk. MT Bank Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 19,667 in MT Bank Corp on August 27, 2024 and sell it today you would earn a total of 2,637 from holding MT Bank Corp or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. MT Bank Corp
Performance |
| Timeline |
| Sabre Insurance Group |
| MT Bank Corp |
Sabre Insurance and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and MT Bank
The main advantage of trading using opposite Sabre Insurance and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Sabre Insurance vs. International Biotechnology Trust | Sabre Insurance vs. Compagnie Plastic Omnium | Sabre Insurance vs. Young Cos Brewery | Sabre Insurance vs. Baker Steel Resources |
| MT Bank vs. American Homes 4 | MT Bank vs. Monster Beverage Corp | MT Bank vs. Zoom Video Communications | MT Bank vs. Batm Advanced Communications |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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