Correlation Between Sabre Insurance and Jyske Bank
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Jyske 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 Jyske 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 Jyske Bank AS, you can compare the effects of market volatilities on Sabre Insurance and Jyske 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 Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Jyske Bank.
Diversification Opportunities for Sabre Insurance and Jyske Bank
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabre and Jyske is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Jyske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Bank AS 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 Jyske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyske Bank AS has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Jyske Bank go up and down completely randomly.
Pair Corralation between Sabre Insurance and Jyske Bank
Assuming the 90 days trading horizon Sabre Insurance is expected to generate 2.83 times less return on investment than Jyske Bank. In addition to that, Sabre Insurance is 1.13 times more volatile than Jyske Bank AS. It trades about 0.01 of its total potential returns per unit of risk. Jyske Bank AS is currently generating about 0.03 per unit of volatility. If you would invest 46,418 in Jyske Bank AS on September 14, 2024 and sell it today you would earn a total of 4,422 from holding Jyske Bank AS or generate 9.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Jyske Bank AS
Performance |
| Timeline |
| Sabre Insurance Group |
| Jyske Bank AS |
Sabre Insurance and Jyske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Jyske Bank
The main advantage of trading using opposite Sabre Insurance and Jyske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Jyske 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 Jyske Bank will offset losses from the drop in Jyske Bank's long position.| Sabre Insurance vs. SupplyMe Capital PLC | Sabre Insurance vs. Lloyds Banking Group | Sabre Insurance vs. Premier African Minerals | Sabre Insurance vs. SANTANDER UK 8 |
| Jyske Bank vs. Impax Environmental Markets | Jyske Bank vs. Symphony Environmental Technologies | Jyske Bank vs. Hansa Investment | Jyske Bank vs. Intuitive Investments 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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