Correlation Between Sabre Insurance and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and CompuGroup Medical 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 CompuGroup Medical 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 CompuGroup Medical AG, you can compare the effects of market volatilities on Sabre Insurance and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and CompuGroup Medical.
Diversification Opportunities for Sabre Insurance and CompuGroup Medical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabre and CompuGroup is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Sabre Insurance and CompuGroup Medical
Assuming the 90 days trading horizon Sabre Insurance Group is expected to generate 0.54 times more return on investment than CompuGroup Medical. However, Sabre Insurance Group is 1.87 times less risky than CompuGroup Medical. It trades about 0.0 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about -0.1 per unit of risk. If you would invest 13,414 in Sabre Insurance Group on August 27, 2024 and sell it today you would lose (234.00) from holding Sabre Insurance Group or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. CompuGroup Medical AG
Performance |
| Timeline |
| Sabre Insurance Group |
| CompuGroup Medical |
Sabre Insurance and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and CompuGroup Medical
The main advantage of trading using opposite Sabre Insurance and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Hyundai Motor | Sabre Insurance vs. Toyota Motor Corp |
| CompuGroup Medical vs. Samsung Electronics Co | CompuGroup Medical vs. Samsung Electronics Co | CompuGroup Medical vs. Hyundai Motor | CompuGroup Medical vs. Toyota Motor Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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