Correlation Between Sabre Insurance and Public Service
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Public Service 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 Public Service 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 Public Service Enterprise, you can compare the effects of market volatilities on Sabre Insurance and Public Service 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 Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Public Service.
Diversification Opportunities for Sabre Insurance and Public Service
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabre and Public is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Public Service Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service Enterprise 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 Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service Enterprise has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Public Service go up and down completely randomly.
Pair Corralation between Sabre Insurance and Public Service
Assuming the 90 days trading horizon Sabre Insurance Group is expected to generate 1.46 times more return on investment than Public Service. However, Sabre Insurance is 1.46 times more volatile than Public Service Enterprise. It trades about 0.05 of its potential returns per unit of risk. Public Service Enterprise is currently generating about 0.07 per unit of risk. If you would invest 9,016 in Sabre Insurance Group on October 13, 2024 and sell it today you would earn a total of 4,284 from holding Sabre Insurance Group or generate 47.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.79% |
| Values | Daily Returns |
Sabre Insurance Group vs. Public Service Enterprise
Performance |
| Timeline |
| Sabre Insurance Group |
| Public Service Enterprise |
Sabre Insurance and Public Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Public Service
The main advantage of trading using opposite Sabre Insurance and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service's long position.| Sabre Insurance vs. Eastman Chemical Co | Sabre Insurance vs. EVS Broadcast Equipment | Sabre Insurance vs. Zinc Media Group | Sabre Insurance vs. Prosiebensat 1 Media |
| Public Service vs. Vienna Insurance Group | Public Service vs. InterContinental Hotels Group | Public Service vs. Primorus Investments plc | Public Service vs. Sabre Insurance Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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